PVR INOX Ltd. share price target

PVR's operational performance was broadly in-line with our estimates with pre Ind-AS EBITDA margin of 6.2% (PLe 7.4%) aided by strong content (5 movies crossed Rs1bn mark). ATP/SPH at Rs239/Rs129 was 14%/28% higher than 3QFY20 (comparable pre-COVID quarter) indicating that recovery has been sharp. While onset of 3rd wave has delayed the recovery process and prompted us to re-align our FY22 reported EBITDA estimates (loss of Rs467mn versus break-even earlier) we keep our FY23/FY24 EBITDA estimates broadly intact amid 1) less severe nature of the virus and 2) pick up...

PVR broke even at the EBITDA level, at INR136m (est. INR327m), for the first time since the COVID-19 outbreak, led by: a) a strong 26% ATP increase, which resulted in a revenue of INR5.9b, 36% below pre-COVID or 3QFY20 levels, and b) fixed opex contained at 13% below pre-COVID levels. Achieving footfalls over pre-COVID levels by the last week of 3QFY22 reflects positively. With the expectation of a swift recovery from the third COVID wave and a healthy ATP growth, we revise our FY23E/FY24E EBITDA estimate by 4.6%/13.3%. The advancement of OTT platforms and shrinking...

PVR Ltd owns and operates multiplexes across 21 States and UT's with 855 screens (including 9 in Colombo). Major income segments for them are Box office, Food & Beverage (F&B) and Advertisement (Ad). PVR reported revenue of Rs.120cr (103% QoQ) from core operations as cinemas re-started operations from 30th July 2021. As of 30th September, 588 screens are operational out of total 855 screens. PVR has received permissions to operate cinemas across all states and UTs in India and Sri Lanka....

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With the opening of cinemas across the country, easing of lockdown and line-up of robust content we expect PVR to witness recovery in coming quarters. We expect the company to add screens to pre covid level in FY23. This coupled with increasing contribution from non-cinema content (like T20 cricket & gaming), receding competition from single screen theatres and strong screen addition in long run prompts us to be positive on the stock. Hence we upgrade our rating from HOLD to BUY on the stock with a target price of Rs 1,955 based on EV/EBITDA of 16x FY23 EBITDA. Key Highlights and Investment Rationale...

Hollywood & regional content drives revenue growth: Top-line increased 197.5% YoY (base impact due to outright closures in 2QFY21) to Rs1,203mn (PLe Rs983mn). Hollywood & regional content led the operating performance with movies like F-9, Shang-Chi, Chal Mera Putt, and Puaada performing well at the box...

PVR restarted operations from 30th Jul'21, garnering 4% occupancy levels, with 588 operational screens (~70% by Sep'21). The quarterly operating loss run-rate was contained at INR1.2b v/s an operating loss of INR810m YoY and INR1.3b QoQ, with revenue down 89% in 2QFY22 against preCOVID or 2QFY20 levels. A strong pipeline of movies to be released coupled with a fully operational network, despite some restrictions, should usher a revival. However, advancement of OTT platforms, shrinking of the exclusive window to four weeks for Cinemas, and recent capital raise could overplay on valuations....

PVR Ltd owns and operates multiplexes across 21 States and UT's with 846 screens (including 9 in Colombo). Major income segments for them are Box office, Food & Beverage (F&B;) and Advertisement (Ad). PVR reported revenue of Rs.59cr (Q4FY21-Rs.181cr) from core operations as Covid second wave impacted Q1FY22 operations significantly. 63% of total screens are permitted to operate with various restrictions...

EBITDA loss (without impact of Ind-AS116) was at | 121.5 crore against EBITDA loss of | 127.7 crore in Q4 as it has provided for lower rental expenses (| 30.9 crore vs. | 70.9 crore in Q4) given they are under...

PVR's operational performance was subdued with Ind-AS adjusted EBITDA loss of Rs1.2bn due to paucity of content and intermittent closures. However, with declining COVID cases, staggered re-opening is on the cards (13 states and 3 UT's have already given permission to re-open) and footfalls are likely to stabilize by 2HFY22. Though emergence of 2nd wave has delayed the recovery process prompting us to cut our footfall estimates by 31% to ~43mn in FY22 we remain constructive over the long term as content pipeline is strong which is expected to result in bunching up of releases post reopening. Further, we believe narrowing window gaps and higher distributor...