PVR INOX Ltd. share price target

EBITDA loss increased 34% QoQ to INR1.1b (v/s our estimate of a loss of INR537m), despite reopening to cinemas as 50% capacity restrictions and lack of fresh content, led to meager (~1%) occupancy. We roll forward our estimates to FY23E and revise down our FY22E EBITDA/PAT estimates by 3%/12% on the back of slower recovery, thriving OTT market, and changing consumer behavior that could pose a risk to long term occupancies and business economics. We downgrade to Neutral. PVR's 3QFY21 revenue fell 93% YoY to INR634m (49% below our estimate)...

PVR's Ind-AS adjusted EBITDA loss of Rs1,268mn (excluding other income) was broadly in-line with our estimate of Rs1,296mn as rigorous cost cutting initiatives resulted in fixed opex burn of Rs527mn per month in 3QFY21. Given prevailing occupancy caps & dearth of fresh content we expect next quarter to be more or less a replica of 3QFY21 where the focus will be on cost management/liquidity. Consequently, we expect Ind-AS adjusted EBITDA loss of Rs4.3bn in FY21E. However, we expect normalcy to resume from FY22 onwards amid strong content pipe-line (pent-up demand due to bunching up...

In Q2FY21, PVRL continued to demonstrate strong cost management amid the shutdown of Cinemas. Its EBITDA (ex-Ind AS) loss of Rs842 mn was lower than our forecast of Rs954 mn and was ~27% lower on QoQ basis. Yesterday, the Maharashtra government joined the 16 states and UTs which have permitted Cinemas to restart operations with an occupancy cap of 50%. PVRL has 151 screens in Maharashtra and reopening being allowed in the state would mean that ~87% of its screens can be reopened. Reopening of Cinemas in most of the key states would enable release of few small-mid budget movies around Diwali and would work...

With lockdown in force for the majority of the quarter, revenue plunged 96%; however, a sharp 83% cut in opex cushioned EBITDA loss (pre-Ind-AS 116) to INR810m (better than est. INR1b). We cut our FY21E/FY22E EBITDA by a further 37%/6% factoring in the delay in the resumption of cinema operations across India reaching EBITDA of INR5.8b by FY22 (at FY20 levels, even after 12% capacity adds)....

PVR's Ind-AS adjusted EBITDA loss of Rs1,159mn was better than our estimates of Rs1,344mn as rigorous cost cutting initiatives resulted in average fixed opex burn of ~Rs320mn per month in 1QFY21 against a guidance of Rs400-450mn given at the start of the lockdown. Further, management guided for a lower burn rate of Rs220-250mn per month in 2QFY21. With reopening timelines being highly uncertain and rising instances of producers opting for the OTT route, we expect FY21E to be highly unpredictable and a complete wash out. However, we expect normalcy...

PVRL has demonstrated strong cost management in Q1FY21 amid the shutdown of Cinemas. Its EBITDA loss of Rs1.16bn was lower than our forecast of Rs1.3 bn. PVRL expects the cash-burn in Q2FY21 to be even lower QoQ. Further, it is confident that part of the cost optimization initiatives to be sustainable. PVRL is hopeful of Government providing the date for reopening of Cinemas towards the end- September in Open-up 5.0'. It is hopeful of Cinemas being allowed to be reopened in October. We factor shutdown in Q2FY21 and addition of 24 screens in FY21 vs. 40 earlier. We factor addition of these towards the end of Q4FY21 and factor utilization of additional...

PVR (with industry association) is in consistent dialogue with the government but there has been no confirmation on reopening yet. It remains hopeful of getting permission to reopen cinemas in Unlock 5 phase i.e. October. Capex plans have been put on hold currently and will be reviewed when the situation normalises. They indicated 30 screens are in the pipeline for FY21E while another 28 screens are under fit out phase with total capex of | 115 crore. We bake in 20 screens addition for FY21E and 65 screens addition in FY22E. Consequently, we build in marginal footfalls growth of...

In a washout first quarter with no meaningful revenue, PVR (PVRL) reported operating and net losses of Rs 1.2bn and Rs 2.3bn respectively.

PVR has opened cinemas in Sri Lanka and has seen good response, with ATP Pending capex of INR400m would be put toward the completion of 30 screens (in the final stages) and of INR750m toward 28 screens (in the fit- PVRs near-term profitability and business scale would be affected as cinemas would be the last to open and would operate with a much reduced capacity and Rental waivers come as a great relief for the company; however, other operational charges, such as sanitization costs, would increase post the reopening of the cinemas, along with expected decline in revenues in the high- PVRs remains comfortable in terms of liquidity, with INR5.5b in cash (INR3b proceeds from rights issue) and INR1.6b in undrawn credit lines available from The recent shift in movies to OTT platforms and increased viewership raises concerns regarding increased competition from the OTT medium.

PVR Ltd owns and operates multiplexes across 21 States and UT's with a total of 825 screens (including 9 in Colombo). Major income segments for them are Box office, Food & Beverage (F&B;) and Advertisement (Ad). We recommend Subscribe rating to the right issue with a long term view even though we expect uncertainties till normalcy is attained....