PVR INOX Ltd. share price target

PVR's performance was marred (revenue/Ind-AS adjusted EBITDA miss by 8%62% respectively) by weak content (only 2 movies viz; Tanhaji and Baghi 3 crossed Rs1bn in box office collections during 4QFY20 versus ~4/5 movies in 4QFY19) and COVID-19 led shutdown (loss of revenue for 15-20 days without complete rationalization of fixed cost). We have drastically cut our sales/EBITDA estimates for FY21 and FY22 as 1) occupancy in 1HFY21 is likely to be negligible with a gradual recovery in 2HFY21 resulting in ~60% decline in footfalls over FY20 2) cautious screen expansion strategy...

9 June 2020 PVRs 4QFY20 revenue/EBITDA plunged 23%/73% in 4QFY20 due to cinema closures led by the COVID-19 pandemic. Revenue was in line, while EBITDA was better than expected on lower-than-estimated operational expenses. Given the complete washout in 1QFY21 (on the nationwide lockdown) and talks of reduced capacity due to social distancing, we have cut our estimated FY21/FY22E revenue by 45%/13%. We expect EBITDA loss of INR677m in FY21E (v/ profit of INR5b earlier) and cut EBITDA est. 4QFY20 consolidated revenue declined 23% YoY (down 30% QoQ) to INR6.5b (inline), mainly due to closure of cinemas during the last few days in Mar20 owing to the COVID-19 crisis. Subsequently, footfalls declined 29% YoY to 19.5m while occupancy stood at 30.6% in 4QFY20. Average ticket price rose to INR204 (4.6% YoY) along with an increase in spend per head to INR96 (5.7% YoY). On pre Ind-AS 116, EBITDA declined 73% YoY to INR428m (v/s est.

Estimates are made with a view that the theatres will be opened by mid-Q2 and start normalcy from FY22. Huge backlog of film content and strong brand name will be the growth catalyst once normalcy is obtained. OTT platforms are not expected to be an alternative for movie releases with its current subscription model. However, strategies adopted by OTT platforms to capture the market need to be carefully watched. Adoption of several measures to bring down fixed cost will help the...

We highlight that notwithstanding the recent Covid-19 scare, the structural story of multiplexes as a proxy play on urban discretionary remains. However, leisure activities and discretionary spend will take a backseat during stressed macroeconomic setup in the near term. Hence, we value PVR at 9x FY22E (ex-Ind-AS) EV/EBITDA and arrive at a target price of | 1060/share with a HOLD rating. We value Inox Leisure at 6x FY22E (ex- IndAS) EV/EBITDA and arrive at a target price of | 235/share with a HOLD rating....

Single screens to battle for survival post-COVID Single screens have been facing existential crisis since long. Already fraught with hygiene & maintenance challenges which was hurting footfalls, COVID-...

We have revised downward our FY20E & FY21E revenue estimate on account of temporary close down of movie houses and postponement of new releases due to corona crisis. PVR opened its 1st multiplex with 9 screen in Colombo, Sri Lanka. Q3FY20 revenue grew by 9% on a YoY basis owing to growth in all 3 segments. Box office grew by 7%, F&B; by 13% and Ad by 8%. Hollywood and Bollywood box office collection has increased by 47%...

PVRL's Q3FY20 revenue was in-line while EBITDA margin (adj. for AS-116 impact) was a beat to our forecast. Consolidated revenue of Rs9,127 mn grew by 8.6% YoY. Consolidated EBITDA margin of 19.7% grew by 20bps YoY vs. our forecast of 18.9%. PVRL has added 67 screens YTD and is confident of adding 90-100 screens for FY20. It targets to add 75+ screens in FY21 as well. We now factor addition of 80 screens (vs. 70 earlier) for FY20 and maintain our forecast for addition of 70 screens for FY21. We largely maintain our FY20/21 revenue/EBITDA forecast. We maintain ACCUMULATE...

PVR reported an in line operating performance for the quarter with stable growth, albeit weak regional content performance partially tempered the growth. Footfalls came in at 25.9 mn, up 0.8% YoY with box office revenues at | 453 crore, up 6.4%. Gross ATP was at | 210, down 1% YoY. SPH was at | 100, up 11.3% YoY, resulting in 12.6% YoY growth in F&B; revenues. Advertisement revenues grew 8% YoY (like-to-like growth at 2%). EBITDA (without impact of Ind-AS 116) came in at | 180 crore, up 9.7% YoY. Margins of 19.7% (up 20 bps YoY) were also ahead of our estimates of 19%. PAT...

We continue to believe that the multiplex industry is the best placed media segment for growth driven by traction in content performance. Both PVR and Inox remain key beneficiaries of a flourishing multiplex business, which is one of the proxies on rising urban discretionary consumption spends. We value PVR at 14.5x FY21E EV/EBITDA (ex-Ind-AS 116) and arrive at a target price of | 2200 with a BUY rating. We value Inox at 10x FY21E (ex-Ind-AS 116) EV/EBITDA (~30% discount to target EV/EBITDA multiple of PVR) to...

Low-budget movies continue to perform well, with Bala' garnering ~Rs1bn in collections. Three movies collected >Rs1bn vs. two in QTD Q3FY19. Hollywood movie collections are expected to remain subdued in Q3, due to a lack of big-franchise movie releases....