Media share price target

pre IND AS EBITDA margin of 7.0% while PVR is expected to report a modest loss due to cost normalization. On the broadcasting side, ad-environment continues to remain a bit soft as FMCG ad-spends have been impacted by RM cost inflation. We expect ZEEL to report 6.4% YoY growth in domestic adrevenue coupled with a one-time fillip in income from theatrical success of TKF and Valimai (co-produced by Zee Studios). As far as luggage sector is concerned, demand environment continues to remain robust despite a minor hiccup in Jan due to Omicron. While RM environment continues to remain inflationary; VIP has taken a price hike of...

Media sector is expected to witness a different growth trajectory across segments. For broadcasters, muted ad spends by key category of FMCG/Consumers amid input price pressures, will impact ads for GECs while news segment will witness healthy growth led by state elections tailwinds and global news heavy quarter. For multiplexes, despite a complete washout for the first one and half months, strong box office collections of movies like Kashmir Files, RRR, Gangubai Kathiawadi, etc, will result in a relatively resilient performance....

Merged entity reach & synergy to drive rerating in multiples We note that along with bigger entity with synergy benefits, MergedCo will benefit from faster growth trajectory (the management is looking to add 200+ screens every year and ~2000 screens over the next seven years). In terms of risks, uncertainty on CCI steps ahead will remain. However, consummation of merger will result in entity with higher revenues and margins potential. We maintain BUY on both PVR and Inox Leisure assigning a EV/EBITDA multiple of 14x on the MergedCo FY24 EBITDA (vs. 13x for PVR and 11x on Inox, earlier). We assign a target price of | 2265/share for the...

A tectonic shift is taking place in the multiplex industry with the top 2 operators (PVR and INOX) deciding to merge their operations. The merged company would be financially strong and can grow faster than possible individually. It would help them tap growth even from smaller markets (Tier 2 and below).

Multiplexes: Recovery seen but new restrictions risk persists Q3 started on a strong note for multiplexes as major release like Sooryavanshi, Spiderman, etc, fared well. However, the second half of December saw weakness as releases saw a relatively tepid response as the Omicron scare surfaced. In terms of Q3 performance, we expect footfalls at ~9 million and ~13 million for Inox and PVR which would be ~53% and ~50% of pre-Covid levels of Q3FY20, respectively. While ad revenues would much lower at 25-30% of pre-Covid levels, we expect strong growth...

The performance of the media sector is likely to remain below pre-Covid levels again in Q2FY22. While broadcasters on a depressed base are likely to see sharp ad growth YoY, ad revenues are likely to remain below preCovid levels. Multiplexes would have another quarter of washout performance. However, with strong content line up amid festive season...

Inox. Within travel & tourism, IRCTC will stand to benefit from ticketing delta schools bodes well for both Navneet and S Chand. Inox is an ideal pick to ride on the unlock theme as footfall stabilization is...

corresponding revenue accretion. We thus, expect PVR and Inox to report Ind-AS adjusted EBITDA loss of Rs1.7bn and R1.2bn respectively in 1QFY22. While near term outlook is uncertain, recent big ticket Hollywood releases (Fast & Furious-9, A Quiet Place-2, The Conjuring-3) and strong Bollywood movie pipeline mitigates content risk post re-opening. Liquidity risk is also minimal until full recovery, given PVR/Inox have cash balance of Rs7.3bn/Rs780mn as of March. Recent fund raise of Rs3bn has further bolstered cash reserves of Inox. We expect footfall stabilization in 2HFY22 amid pick up in vaccination drive and maintain our...