PVR INOX Ltd. share price target

Post-merger, board will be reconstituted and will have 10 members. Both promoter families will have equal representation on board with 2 seats each. We believe PVR and Inox merger is a win-win situation as it would lend invincible size advantage to the combined entity (pre-COVID screen/BO market share of ~46%/30% respectively) and result in material revenue & cost synergies by improving bargaining power with film distributors, real estate developers, ad-networks and ticket aggregators. Merger will relegate competition to backyard (Carnival & Cinepolis have ~400 screens each) and...

PVR Ltd own and operate multiplexes across 21 States and UT's with 860 screens (including 9 in Colombo). Major income segments for them are Box office, Food & Beverage (F&B) and Advertisement. For Q3FY22, PVR reported revenue of Rs.614Cr (410% QoQ) from core operations supported by strong quality contents and operation of cinemas across majority of the states. As of January, cinemas across the country (excluding Delhi and Haryana states) are operating with certain capacity restrictions. Discussions on rental waivers/discounts for second wave has conclud-...

Reported revenue came in at | 614.2 crore, (up ~4x QoQ) with box office revenue of | 300.2 crore, ad revenues of | 40.9 crore and | 180.5 crore of F&B revenues. Footfalls were up 3.5x QoQ at 14.5 million and ATP at | 239 was up 18% QoQ owing to slate mix. SPH at | 129 was flattish QoQ EBITDA (ex- Ind AS116) was at | 38 crore (margin 6.2%) against EBITDA loss of | 115.1 crore in Q2. On reported basis, EBITDA was at | 164.9 crore The reported net loss was lower at | 10.2 crore due to other income of | 67.4 crore with respect to rental waivers received (net of rent paid). The...

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....

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...

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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...