PVR INOX Ltd. share price target

PVR has maintained its target to add 91 screens (ex-SPI Cinemas) in FY19. We remain conservative and maintain our forecast for addition of 70 screens. A higher screen addition remains an upside trigger to our forecast. PVR also confirmed that it would launch its low-cost brand for Tier 2-3 cities in FY19. We fine tune our EBITDA and EPS forecast for FY19/20E. We maintain BUY with TP of...

ICICI Securities Ltd | Retail Equity Research PVR reported strong set of number riding on healthy content performance and aided by recently acquired SPI cinema acquisition consolidation (from 17th Aug, 2018). Q2FY19 reported revenue came in at |708.6 crore, up 27.6% YoY. For comparability with our estimates, Revenues (ex SPI) stood at | 652.7 crore, up 17.5% YoY and in line with our expectation of 653.12 crore. The PVR (ex SPI) ATP, stood at |211 ( vs our expectation of |210) and footfalls which...

PVR has announced acquisition of SPI Cinemas, a leading multiplex player in the Southern market. The acquisition is expected to be complete in a month and would make PVR no. 1 player in key markets like Chennai, Bangalore and Hyderabad. PVR would pay EV of Rs10 bn in total and would fund it through a combination of internal accruals, debt and equity. Based on the brief financials of SPI Cinemas shared...

ICICI Securities Ltd | Retail Equity Research PVR Ltd has announced the acquisition of south India based multiplex player SPI Cinemas, a leading exhibitor in South India for an EV of | 1043 crore. The company, in FY18, reported a topline of ~| 310 crore and EBITDA of | 63.3 crore, with margins of 20.4%. It operates in all southern states (major player in Chennai) and also has a presence in Mumbai (five screens). Total number of operational screens are 76 (including four screens each in Hyderabad, Bengaluru to be opened in the next 12...

Higher Food and Beverage income drove the profits... Revenue grew marginally in Q1FY19 on lower ATP growth Q1FY19 revenue grew at ~ 8%YoY mainly attributed to lower ATP growth and lower advertisement income. Net ticket revenue and F&B; collections registered a growth of 12% and 23% respectively while advertisement revenue grew by 7% YoY. Footfalls also improved by 8% YoY growth with occupancy registering a higher rate (36.1%). No big hits from Bollywood lowered the admits, being one of the reason for lower revenue growth in this quarter. The share of Bollywood movies stood at 48% vs 58% in Q1FY18...

PVR's Q1FY19 result was a beat to our forecast as regards EBITDA and EPS. This was mainly driven by higher growth in footfalls and advertisement revenue vs. our forecast and a YoY decline in repairs & maintenance cost. Outcome of the PIL as regards allowing outside F&B; and news of risks from government interfering with pricing of F&B; weighs on the valuation of PVR in the near term. We believe that in case of a court process is followed multiplex players are on a strong footing. However, the timeliness of the outcome remains uncertain. While we fine tune our EBITDA and EPS forecast for FY19/20E, given the uncertainty...

ICICI Securities Ltd | Retail Equity Research Q1FY19 revenues came in at | 696.3 crore, up 9.9% YoY and marginally above our expectation of | 690.8 crore, on account of better-than-expected ATP, which came in at | 217 (vs. our expectation of | 216) and footfalls that came in at 22.7 million (mn) (8.1% YoY) driven by higher share of Hollywood movies vs. Inox that had reported 1.1% YoY decline in footfalls. The spend per head (SPH) grew 8% YoY to | 94 crore, in line with our expectations. Net...

PVR reported revenue growth of 9.4% YoY on back of higher Net box office collection and better F&B; revenue. EBITDA margin improved 211bps YoY to 19.7% due to lower overhead expenses due to GST credits. We expect occupancy levels to improve over the next two quarters helped by a strong Hindi content pipeline. PVR has corrected by almost 16% since the F&B; announcement and is currently trading at inexpensive valuations of 10x/9x based on our FY20/FY21 EV/EBITDA estimates. We upgrade PVR to an...

Maharashtra intends to allow outside food and beverages inside multiplexes from August 1, 2018 (as announced by Food & Civil Supplies Minister in state legislature). The comment has come in the background of a public interest litigation (PIL) filed earlier (media link) challenging the ban on packed food, water bottles inside cinema halls on the grounds that it violates fundamental right to life of medically vulnerable persons & senior citizens. The Bombay High Court in its ruling in April, 2018, reiterated that patrons cannot be unilaterally prohibited from bringing their own food & water bottles inside...

PVR Ltd owns and operates multiplexes across 19 States and UT's with a total of 625 screens. Major income segments for them are Box office (Ticket revenue), Food & Beverage and Advertisement income. Q4FY18 revenue grew at healthy rate of ~19% on a YoY basis while PAT grew by 1700%(YoY) owing to better than expected operating leverage. Added 13 new screens in Q4FY18 while average occupancy stood at 31.5% slightly higher than our expectations. Average Ticket Prices (ATP) witnessed a ~10%YoY growth and Food &...