PVR INOX Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Revenue growth of 7.4% YoY was maintained owing to upbeat performance in the F&B; segment wherein the Spends Per Head (SPH) grew ~12.0% YoY to | 83.0 driving the total F&B; revenues to | 134.9 crore, up 19.0% YoY. The after effects of demonetisation led to lower net box office collections which came in at | 269.2 crore, lower than expectations of | 275.0 crore. The footfalls came in at 17.9 million, up 8.5% YoY (Idirect estimates: 18.3 million). The...

ICICI Securities Ltd | Retail Equity Research Revenue growth of 16.8% YoY was led by strong ad revenue growth of 35.3% to | 62.4 crore vs. estimated 24.0% YoY. Net box office collections came in at | 278.1 crore, up 1.3% YoY, aided by 8.0% YoY growth in average ticket prices (ATP) to | 202.0 & box-office performance of movies such as Sultan, Pink, Rustom, etc. Food & beverage (F&B;) revenues came in at | 139.6 crore, aided by 24% YoY growth in spends per head (SPH) to | 84.0...

ICICI Securities Ltd | Retail Equity Research Net ticketing revenues grew 11.5% YoY to | 305.6 crore aided by a 8.9% increase in the footfalls to 20.7 million (includes one month of DT Cinemas footfall) and 6.6% YoY increase in average ticket prices (ATPs) to | 195. Spends per head grew 5% YoY to | 78 resulting in 13.7% YoY growth in F&B; revenues to | 147.5 crore. Advertisement revenues grew 12.7% YoY to | 51.5 crore EBITDA came in at | 116.7 crore vs. our expectation of | 105.7 crore...

PVRL is currently subject to multiple indirect taxes: (a) entertainment tax of 26.9% in FY16 on net box office collection (ticket sales constituted ~54% of FY16 revenue), (b) service tax of 14.5% on advertising revenue (~11% of FY16 revenue),...

ICICI Securities Ltd | Retail Equity Research Revenue growth of 37.7% YoY was aided by footfalls of 15.3 mn (vs. estimate of 14.9 mn), up 35.2% YoY. Net collections came in at...

Revenue and EBITDA margin ahead of estimates: PVR Ltd (PVR) reported overall revenue of INR4.1b (vs. our estimate of INR3.7b) in 4QFY16, marking a growth of 38% YoY, driven by an all-round performance. EBITDA margin...

PVR pioneered the multiplex revolution in India by establishing its first multiplex in 1997. Since then the company has spread its wings across 106 properties in 43 cities having 474 screens as of Aug-15. It acquired Cinemax in 2012 to become the largest multiplex operator in the country. Low density of screens as compared to emerging and developed world and better movie watching experience provided by multiplexes is leading to a preference change among the public towards multiplexes. After a subdued FY15 we expect the company to grow its revenues/PAT by 27%/227% respectively over FY15-FY17 driven by higher footfalls, increased F&B; spend and greater focus on in-cinema ad revenues. We assign BUY rating for...

Market leader in movie exhibition business: The company is expanding itsmarket share in movie exhibition business through organic & inorganic routes. The company has market share of 29% in 2015 with 503 screens post DT cinemas acquisition. The next phase of growth is likely to trigger from Tier-2 & Tier-3 citiesthrough its expansion plans.

At Rs3,500mn for 29 screens (refer above, we believe the deal is structured), the deal is executed at Rs120mn/screen which is 4-5x the industry capex/screen of Rs20-30mn and is an expensive deal. Currently, PVR has a highly leveraged balance sheet (debt to equity ratio of ~1.6x and debt:EBITDA of 3.3x), which makes funding the deal through 100% debt raising difficult. We believe the mix of 70:30, equity: debt funding is ideal in the given situation and does not stress the income statement too much for PVR. The deal will be marginally EPS accretive...