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GEOJIT BNP PARIBAS Research
COMPANY INITIATING REPORT
RETAIL EQUITY RESEARCH
PVR Ltd
BUY
MEDIA
BSE CODE: 532689
NSE CODE: PVR
Bloomberg CODE: PVR IN
SENSEX: 22,340
CMP Rs480 TARGET Rs610 RETURN 27%
31st March, 2014
Largest exhibitor...the best play
PVR has pioneered the Indian multiplex industry. Through aggressive
expansion and acquisition, PVR emerged as the largest exhibitor in India.
PVR has a scalable business model, and has added 67 new screens in FY14
and ~60 more is expected in FY15E. Along with acquisition synergies,
screen additions will drive near term growth and profitability. PVR has a
premium brand image and enjoys the highest ATP (average ticket price) in
the industry. F&B and Advertisement revenues provide a unique
proposition for growth and profitability. Economy of scale is the key
strength to optimise F&B and Distribution cost. PVR’s exhibition revenue
grew at a CAGR of 27% and F&B and Ad-revenue at 32% and 22%
respectively during FY09-9MFY14. We believe PVR is the best play as it is
well equipped to capitalise on the high growth Indian multiplex industry.
Cinemax acquisition...
Cinemax is a prominent player in the Indian multiplex industry, with 137 screens
across 39 locations. Management plans to refurbish and rebrand the entire
Cinemax screens to PVR in 2 years which will increase ATP, F&B SPH (spend per
head) and Advertisement revenue. PVR also expects to gain efficiencies in F&B
procurement and bargaining power with distributors.
Screen addition...scalable business model
Continuous expansion is the main mantra of PVR’s growth, followed by
improvement in F&B and Advertisement mix. Over the last 3yrs, revenue from
same screens grew at ~11% and new screens at ~60%, while number of screens
grew from 136 to 280 (excluding Cinemax). PVR added 67 screens across 13 new
properties in FY14. We estimate the combined number of screens to reach ~550 by
the end of FY16E.
High margin F&B...a promising future
Strategically, PVR operates a well managed in-house F&B segment, delivering
gross margin of 70%. The segment is set to grow over the coming years, led by
expansion and higher conversion of footfalls into F&B spends. We factor 35%
CAGR in consolidated gross F&B revenue for FY14E-FY16E with 14% CAGR in
SPH during the same period.
Ticket pricing...premium
Company Data
Market Cap (Rs mn)
19,152
Enterprise Value (Rs mn)
26,592
Outstanding Shares (mn)
39.9
Free Float (%)
40
Dividend Yield(%)
0.21
52 week high
Rs 658
52 week low
Rs 280
6m average volume (mn)
0.11
Beta
0.9
Face value (Rs)
10
Shareholding %
Q1FY14
Q2FY14
Q3FY14
Promoters
31.04
30.97
29.80
FII’s
13.53
15.18
18.39
MFs/Insti
19.64
18.74
17.20
Public
33.86
33.15
32.68
Others
1.93
1.96
1.93
100.00
100.00
100.00
3mth
6mth
1 Year
Total
Price Performance
Absolute Return
-21.5 %
3.2 %
65.8 %
Absolute Sensex
5.0 %
10.7 %
18.5 %
Relative Return*
-25.3 %
-6.8 %
39.9 %
*over or under performance to benchmark index
600
PVR
Sensex Rebased
450
300
150
Mar 13
Jun 13
Y.E March (Rs mn)
PVR has the highest ATP (Average Ticket Price) in the industry driven by the rich
experience, prime location and service. PVR’s ATP has grown from Rs.139 in FY09
to Rs 177 in 9MFY14 at ~5% CAGR. Cinemax ATP stands at Rs159 growing at 6%
CAGR. With increase in Cinemax ATP and continued growth momentum, we
factor 5% CAGR in consolidated ATP during FY14E-16E.
Sales
Valuations…
Growth (%)
Sep 13
Dec 13
Mar 14
FY14E
13,173
FY15E
17,312
FY16E
21,122
63.6
31.4
22.0
2,044
2,907
3,694
Growth (%)
74.8
42.2
27.1
PAT Adj
479
878
1,242
Growth (%)
EBITDA
4.7
83.2
41.5
11.8
21.5
30.5
4.7
83.2
41.5
P/E
40.8
22.3
15.7
P/B
2.6
2.3
2.0
13.2
9.6
7.8
6.8
11.0
13.8
1.06
1.07
1.05
PVR is currently trading at one year forward P/E of 22.3x which is ~18% discount
to its last one year average and ~4% premium to 3 year average. After Cinemax
acquisition, valuation of PVR moved in the range of 22x and 34x, with an average
of 27.5x. We factor consolidated earnings CAGR of 61% and a 27% CAGR in
revenue during FY14E-16E. PVR is currently trading at 22.5x and 16x on FY15E
and FY16E earnings estimates. We value PVR with a target P/E of 20x on FY16E
adjusted EPS which is at a discount of ~26% to its last one year average and
recommend BUY with a target price of Rs 610.
EPS
Rahul S.
Analyst
Vinod Nair
Head of Equity Research
Growth (%)
EV/EBITDA
RoE (%)
D/E
Valuations...
PVR is currently trading at ~18% discount to its last
one year average and ~4% premium to 3 year average
one year forward P/E. PVR is currently trading at
22.3x and 15.7x on FY15E and FY16E earnings
respectively. At current levels one year forward
EV/EBITDA is 9x which is ~9% discount to its last
one year average and ~25% premium to 3 year
average.
P/E Price Band
Premium valuation of 20-26x to sustain...
The big question an investor needs to be sure off is
whether the new valuation is sustainable. On
quantitative perspective the valuation is reasonable
for PVR’s strong earnings prospects. We are
optimistic on the earnings growth driven by
improved profitability and have built in a CAGR of
61% for FY14E-16E consolidated earnings. EBITDA
margins have been stable at 14.5% in last 2 years and
we expect an improvement of 200bps during FY14EFY16E driven by Cinemax synergy & efficiency from
matured screens. ROCE and ROE which currently
stands at 7% and 10% are expected to see an
improvement with earnings growth. PVR’s ROE
which is currently at 10% is set to improve to 14% by
FY16E with higher earnings growth and improved
profitability. PVR’s Debt Equity mix is expected to
remain stable at its current level of 1x. PVR will be
able to leverage its strong earnings to control the debt
levels even in a capex driven business growth in the
coming years.
PVR is currently trading at one year forward P/E of
22.3x. PVR acquired Cinemax India Ltd in Q4FY13.
Consolidation resulted in 55% and 70% incremental
growth in 9MFY14 consolidated revenue and earnings
respectively. This gives rise to a low earnings base
and hence historical valuations are no longer
comparable.
700
30
27
23
20
17
550
400
250
100
Mar 11
Sep 11
Mar 12
Sep 12
Mar 13
Sep 13
Mar 14
Source: Company, Geojit BNP Paribas Research
P/E one year forward
35
One yr fwd P/E
AVERAGE +1 SD
AVERAGE
AVERAGE-1 SD
b
30.17
30
26.59
25
23.02
20
15
Jan 13
Apr 13
Jun 13
Sep 13
Dec 13
Mar 14
Source: Company, Geojit BNP Paribas Research
PVR and Indian multiplex industry were at their early
growth phase when listed in FY07. PVR enjoyed very
high valuation (average one year forward P/E 95x) till
FY10 led by high expectations of strong earnings &
business visibility. But reality turned the corners as
earnings slowed during FY09-FY10. Accordingly
valuations adjusted to a range of 14x during FY11FY12 with earnings growth stabilising.
New Valuation trajectory...P/E 20x-26x
Cinemax acquisition witnessed PVR’s emergence as
the largest player and enhanced confidence in
investors’ eyes, thus leading to a new valuation
trajectory. Cinemax acquisition has increased the
enterprise value (EV before acquisition Rs11bn and
after Rs17bn), thus historical valuation seems no
longer a benchmark. One year forward P/E moved in
the range of 23x and 34x, with an average of 27.5x.
From a qualitative aspect, PVR’s leadership in the
high growth multiplex industry validate the current
valuation. Indian cinema industry is expected to
continue its growth trajectory with domestic
theatricals playing the lead growth driver as per
FICCI-KPMG Indian Media and Entertainment Report
2013. The industry is expected to be worth Rs 193.3 bn
by 2017 growing at a CAGR of 17%. Indian multiplex
industry which is still at a nascent stage is left with
huge growth potential as single screens lose relevance
and struggle to match the operating efficiencies of
large scale multiplexes. Multiplex currently represent
only ~8% of India’s total screen capacity but account
for 1/3rd of total box office revenue which is expected
to improve significantly with greater penetration into
Tier 2 and 3 cities.
Pivotal investment opportunity in the sector...
For an investor who wants to be present in this high
growth entertainment sector, PVR will be a pivotal
investment opportunity. PVR’s dominance in the
industry could be seen from its commanding 30-35%
and 20-25% respective shares in Hollywood and
Bollywood box office revenues of Indian multiplexes.
Aggressive expansion plans into tier 2 & 3 cities and
premium branding makes it a key beneficiary of
industry’s high growth opportunity. PVR which is
still in its prime growth phase could see a moderation
in valuation only once the business and the industry
stabilises which makes a strong case for the premium
valuation (though not quantifiable) of PVR to sustain.
Peer valuations…
While drawing a comparison with global multiplex
players, PVR is at a significant premium to FY14E and
FY15E average valuations, while FY16E is moderately
in line. This reflects the market’s optimism on PVR’s
near-term earnings growth and we feel the premium
over peers will prevail. The players (average capacity
of 5000 screens) of matured markets like USA and
Canada are valued at an average one year forward
P/E of 14x-18x. PVR being the market leader in an
emerging market with high growth potential and
scalability, a 10-12% premium over these players are
reasonable.
P/E Peer comparison
Multiplex Operators
P/E
Earnings Growth(%)
FY14E FY15E FY16E FY14E FY15E FY16E
MAJOR (Thailand)
16.6 14.6
13.5
Village Roadshow ltd (Aus)
18.0 15.1
14.6
CJ CGV Co Ltd (Korea)
16.5 14.8
12.2
Kinepolis (Belgium)
19.7 17.7
15.1
AMC Entertainment Inc.(U.S)
24.4 18.6
15.0
Regal(U.S)
16.2 14.8
12.8
Cineplex(Canada)
23.2 19.6
16.1
Average
19.2 16.5
14.2
PVR
40.8 22.3
15.7
Premium (%)
112.5 35.1
10.6
Source: Bloomberg Estimates, Geojit BNP Paribas Research
(5.1)
3.0
27.2
3.2
10.4
36.3
6.3
44
N.A
Recommend BUY...Target price Rs610
13.8
17.7
27
42.1
4.4
11.0
18.2
25.2
83
N.A
11.7
6.8
35
43.6
3.6
13.2
21.6
24.3
42
N.A
We value PVR with a target P/E of 20x (which is at
the lower band of post acquisition valuation and
~26% discount to last one year average) on FY16E EPS
and recommend BUY with a target price of Rs 610.
Investment Rationale…
Largest exhibitor...the best play
PVR pioneered the Indian multiplex industry and
emerged as the largest multiplex chain in the country
with acquisition of Cinemax India Ltd in January
2013. PVR’s primary operating segment is Film
exhibition which contributes ~60% of the total
revenue. F&B and Advertisement revenues provide a
unique proposition for growth and profitability in
addition to Exhibition revenue. PVR has also forayed
into other retail entertainment like bowling, gaming
and restaurant. PVR currently operates 135 bowling
lanes in 6 locations under PVR Bluo brand.
The combined capacity of PVR and Cinemax as on
date is 421 screens across 97 locations. Economy of
scale is PVR’s key strength which helps optimise
operating costs like F&B procurement & Distributor’s
share. PVR has an edge over its peers in pricing and
location. 67 screen additions in FY14 followed by ~60
more in FY15E, along with Cinemax acquisition
synergies will drive near term growth. Ticket pricing
(ATP), Occupancy of screens, conversion ratio of
footfalls into F&B are key metrics that measure and
influence PVR’s performance. PVR strikes a perfect
balance in these multiple factors to effectively sustain
its leadership. We believe PVR is the best play as it is
well equipped to capitalise on the high growth Indian
multiplex industry. PVR is expected to leverage its
industry expertise in successful integration and
rebranding of Cinemax.
Cinemax Acquisition...
PVR acquired controlling stake in Cinemax India Ltd
in Q4FY13. Cinemax is a prominent player in Indian
multiplex space, with 142 screens across 40 locations
in the country which include common locations.
Cinemax was amalgamated to PVR with shares
converted in the ratio 7:4.
Cinemax has strong presence in western and southern
India. PVR which concentrated on the northern (NCR)
region of the country has gained strong foothold in
other parts of the country with Cinemax. The sheer
size of the combined entity will bring in synergies
through bargaining power in Exhibition (better deals
with distributors) and other operating segments
which can reflect in margins.
Screen distribution
Cinemax
PVR(Standalone)
3%
North
7% 7%
17%
south
38%
39%
west
east
69%
Source: Company, Geojit BNP Paribas Research
Combined screen distribution (PVR+ Cinemax)
5%
48%
19%
Screen addition...scalable business model
Continuous expansion is the main mantra of PVR’s
growth. PVR & Cinemax has a combined capacity of
421 screens across 97 locations as on date. PVR has
been aggressively expanding in recent years and
expects to add 500 new screens in next 5 years. PVR
added 67 screens across 13 new locations in FY14. We
estimate the total number of screens to reach ~550 by
the end of FY16E.
19%
28%
sponsorship, ticket price as well as F&B revenues. A
successful rebranding will be a key point to watch as
common locations should be dealt in a way that PVR
does not lose its edge over peers.
North
Screens
south
40
west
35
east
30
25
Source: Company, Geojit BNP Paribas Research
Acquisition synergies to flow in...
PVR expects to gain efficiencies in F&B procurement
and distribution cost with Cinemax integration. The
combined screen capacity is expected to help PVR
negotiate more favourable agreements with
distributors. Advertisement revenue of Cinemax will
see significant improvement influenced by PVR’s
strong clientele and integrated ad-sales team.
Upgrading Cinemax screens to PVR will help increase
the pricing and better realisation per screen. Currently
the ATP of Cinemax which is at a discount of 9-10% to
PVR will increase and bridge the gap with PVR
pricing. Cinemax screens in common locations will
bring more flexibility in operations and bring down
opportunity revenue loss due to capacity constraints
in such locations.
Cinemax rebranding...
Cinemax screens will be upgraded and rebranded to
PVR on a phased manner which management refer to
as a “cherry picking” exercise. The rebranding in the
initial phase will be carried out on selective properties
which require immediate refurbishments and screens
in locations where Cinemax presence is relatively low.
Management plans to convert the entire screens to
PVR in ~24 months with an average capex of Rs 20mn
per screen. Rebranding will bring in incremental
Revenue per screen (Rs mn)
No. of screens
556
500
38
421
32
142
35
34
31
166
600
500
400
31
300
213
200
20
100
FY11
FY12
FY13
FY14E
FY15E
FY16E
Source: Company, Geojit BNP Paribas Research
Over the last 3yrs, revenue from same screens grew at
~11% and new screens at 60% while number of
screens grew from 136 to 267(excluding Cinemax). As
per management, new screens take 18-24 months on
an average to mature in margins. New screens helped
PVR maintain the momentum in footfalls despite
same screens occupancy remaining constant. New
screens have always come up at promising new
locations where PVR has also successfully introduced
premium pricing.
Better regional mix to mitigate risk...
With diversified regional presence, there is scope for
risk mitigation through reduced dependence on single
language by improving the mix of regional languages.
Currently ~65% of PVR’s revenue comes from
Bollywood movies, ~25% from Hollywood and
remaining from regional languages. With limited
scope for content and service differentiation among
players, constant expansion has helped PVR maintain
consistent performance. Aggressive expansion and
acquisition has brought PVR closer to becoming a pan
India exhibitor.
Occupancy largely stable...
Occupancy levels in same screens have been constant
at 20% in last 2 years, but new screens have helped
PVR maintain the growth momentum. Occupancy
levels have not seen any drastic changes over the
years. The average occupancy has been in the range of
30%-37% (factoring average 5 shows per screen per
day) and is largely to remain at these levels. We factor
an average occupancy level of 35% in the coming
years.
ATP (Growth)
PVR
10.0%
Occupancy
PVR
40%
CINEMAX
37% 37%
35%
34%
30%
34%
32%
35% 35%
35% 35%
33%
4.2%
5.6%
5.4%
4.1%
4.6%
5.1%
4.6%
4.6%
4.1%
-4.0%
-6.0%
FY12
FY12
FY13
FY14E
FY15E
FY16E
Ticket pricing...premium
PVR has the highest ATP (Average Ticket Price) in the
industry driven by the rich experience, prime location
and service. PVR follows a flexible pricing across its
screens influenced by locations, contents and timing
(weekday and weekend). ATP of PVR has grown from
Rs128 in FY08 to Rs177 in 9MFY14 at a CAGR of
~5.5%, and of Cinemax at ~5.6% from FY11 - 9MFY14.
While, PVR’s same screen ATP witnessed a growth of
4% during FY12-9MFY14 improving from Rs138 to
Rs183 during FY09-Q3FY14.
ATP
CINEMAX ATP
Consolidated ATP
178
168
162
156
135
153
172
194
186
180
FY13
FY16E
SPH(consolidated), Growth in SPH
80
SPH
168
176
159
FY14E
SPH growth
60
11%
40
43 7%
41
39
54
48
14%
14%
12%
61
15%
69
5%
4%
4%
10%
189
0%
0
FY09
FY10
FY11
FY12
FY13
FY14E FY15E FY16E
Source: Company, Geojit BNP Paribas Research
141
FY12
FY15E
Strategically, PVR operates a well managed in-house
F&B segment, delivering gross margin of ~70%. PVR
bets big on the segment which currently contributes
~22% to PVR’s total revenue. The division also serves
as a key catalyst in maximising revenue from its
matured screens.
20
115
FY11
FY14E
Source: Company, Geojit BNP Paribas Research
38
PVR ATP
FY13
High margin F&B...a promising future
Source: Company, Geojit BNP Paribas Research
140
PVR(Consol.)
-2.0%
26%
FY11
165
8.2%
2.0%
20%
190
CINEMAX
9.0%
6.0%
29%
25%
Cinemax ATP and continued momentum in PVR’s
same screen & new screen ticket prices, we factor 5%
CAGR in consolidated ATP during FY14E-16E. ATP,
according to the management is expected to increase
at inflation rate. We factor a CAGR of 4.3% and 8.7%
for PVR and Cinemax in FY14E-FY16E respectively.
Locations of upcoming screens and content pipeline
will also influence PVR’s ATP.
FY15E
FY16E
Source: Company, Geojit BNP Paribas Research
5% CAGR in consolidated ATP…
ATP of Cinemax which is currently at ~10% discount
to PVR is expected to improve and close the gap once
the brand migrates to PVR. With improvement in
The increased spending pattern of footfalls over the
years is a promising sign for the segment. SPH of PVR
which stood at Rs37.6 has improved to Rs56.2
growing at a CAGR of 8% during FY09-9MFY14 and
at consolidated levels to Rs54. SPH of same screens
has grown at an average rate of 12% and is a
promising sign of better realisations from footfalls in
matured screens and change in spending pattern. F&B
margins can also witness further uptrend with scaled
operations and procurement efficiencies from
Cinemax integration. SPH of Cinemax is currently at
8% discount to PVR. PVR has initiated efforts to
improve F&B quality of Cinemax with investment in
infrastructure and improved quality. The initiatives
are expected to improve F&B realisation of Cinemax
from coming quarters.
The segment is set to grow and also improve the mix
over the coming years, with expansion and higher
SPH with higher conversion of exhibition footfall into
F&B SPH. We factor 35% CAGR in consolidated gross
F&B revenue for FY14E-FY16E with 14% CAGR in
SPH during the same period.
Advertisement Income...To benefit from scale
Another high margin segment of PVR is
advertisement. With an innovative package for
advertisers and expansion to new regions, the
segment is expected to see an uptrend in the coming
years. PVR with its prime location advantage and
large network of screens is an attractive player among
advertisers. PVR has a strong clientele including
major MNCs and regional brands across sectors and is
associated with the top 100 brands in the country.
PVR commands a phenomenal 70% of the advertising
revenue in the cinema medium space and delivers 360
degree exposure & innovative opportunities to
brands, both on-screen and off-screen. PVR
introduced an innovative product- “Pay per Eyeball”
a
unique
audience guarantee
package in
advertisement segment. Under this package, the
advertisers can opt for a guaranteed viewership to
their advertisement. The viewership details of shows
are shared with the advertisers.
significant push in advertisement revenue influenced
by the integrated advertisement sales team and PVR’s
strong clientele.
Financials...
PVR’s consolidated revenue grew at 20% CAGR
during FY09-FY13 (adjusted for Cinemax acquisition)
and we factor 27% CAGR in PVR’s consolidated
revenue for FY14E-16E. EBITDA margins have been
stable at 14.5% in last 2 years and we expect an
improvement of 300bps during FY14E-FY16E. The
profitability and returns are stable with limited scope
of any significant downfall. ROCE and ROE which
currently stands at 7% and 10% are expected to see
improvements with strong earnings growth. Cinemax
acquisition has brought significant debt to PVR’s
books. The consolidated debt stands at Rs5bn as of
H1FY14. We see a marginal increase of x% in debt in
coming years driven by expansion and investment for
Cinemax rebranding. But the debt equity levels are
expected to remain close to its current levels of 1x and
an improving interest coverage ratio.
Consolidated Revenue, EBITDA margin
25.0%
Revenue
20.0%
15.0%
13,173
14.7%
4,593
5,177
FY11
FY12
8,053
15.5%
14.5%
Advertisement Revenue
70%
64%
60%
2,266
35%
40%
531
859
654
1500
27%
31%
1000
26%
23%
20%
FY11
FY12
2500
2000
1,792
1,413
50%
30%
Growth
500
0
FY13
FY14E*
FY15E
FY16E
(*Cinemax full year figures included from FY14E )
Source: Company, Geojit BNP Paribas Research
We factor a CAGR of 27% in consolidated
advertisement revenue for FY14E-FY16E. The segment
is expected to maintain its current ~11% mix in PVR’s
consolidated revenue. Cinemax is expected to see a
25000
20000
17,312
19.3%
16.8%
15000
17.5%
10000
5000
10.0%
0
FY13
FY14E
(*Cinemax full year figures included from FY14E )
Source: Company, Geojit BNP Paribas Research
Consolidated Advertisement revenue, growth
21,122
EBITDA Margin
FY15E
FY16E
PVR...the story of Indian multiplex industry
The Company pioneered the multiplex revolution in
India by establishing the first multiplex cinema in
1997 at Saket, New Delhi. PVR Cinemas began as a
joint venture agreement between Priya Exhibitors Pvt
Ltd and Village Roadshow Ltd in 1995 with 60:40
ratio.The opening of the first multiplex heralded a
new era in the Indian cinema viewing experience,
which also set a role model for others to follow suit.
PVR has set new benchmarks in the cinema exhibition
business including establishment of the first largest 11
screen multiplex in the country, Gold Class Cinema,
luxury cinema, IMAX theatres and ECX (Enhanced
Cinema Experience).
In January 2013, PVR acquired 93.19% of controlling
stake in Cinemax India Ltd, having 135 screens spread
across 38 locations in India, through its wholly owned
subsidiary Cine Hospitality Private Ltd and became
the leader in the Indian Cinema exhibition space. Post
acquisition, PVR together Cinemax currently operates
a cinema circuit consisting of 417 screens spread
across 95 cinemas covering 40 cities in India.
PVR has a long-term vision to excel in the retail
entertainment domain and maintain leadership
position in the cinema exhibition business. Continue
to redefine the cinema viewing experience to movie
connoisseurs with an aim to provide world-class
immersive viewing. PVR will strive to bring new
allied retail entertainment concepts to India to
provide a holistic entertainment experience to its
patrons.
PVR’s primary business is still Film exhibition. The
Company through its wholly owned subsidiary, ‘PVR
Pictures Limited’ is involved in distribution of Indian
and International films across India and also supports
independent filmmakers by releasing their films
under the ‘PVR Director’s Rare’ banner. Its other new
subsidiary PVR Leisure Limited, a Joint Venture
between PVR Ltd and L Capital Eco Limited,
Mauritius focuses on rolling out F&B and retail
entertainment concepts including Hospitality and
Leisure / Gaming. The Company’s existing retail
entertainment venture PVR bluO Entertainment
Limited, a JV with Major Cineplex Group, Plc of
Thailand currently encompasses Bowling Alleys,
Karaoke rooms, Gaming Lounges at 5 centers across
Gurgaon, Delhi, Pune & Bangalore.
Key Risks...
- Quality of Content: Since 60% of PVR’s revenue
comes from exhibition, performance is heavily
dependent on the flow of contents and quality of
content being released during the year. The success
of a release can be highly unstable and seasonal,
therefore impacts the performance of the business.
- Slow Development of Malls: PVR’s aggressive
expansion could be impacted by the slow
development of malls and slowdown in realty. The
number of screens is highly correlated with
commercial real estate development in the country,
which could be impacted by overall economic
slowdown.
- Regulatory controls: Any significant changes in
regulations
regarding
ticket
prices
and
entertainment taxes could impact the revenue.
Ticket pricing in many states is regulated by state
governments.
- Increased real estate prices could lead to higher
lease rentals which will directly impact the
operating margins.
Consolidated Financials
Profit & Loss Account
Y.E March (Rs mn)
Sales
% change
EBITDA
% change
Depreciation
EBIT
Interest
Other Income
PBT
% change
Tax
Tax Rate (%)
Reported PAT
Adj*
Adj PAT
% change
No. of shares (mn)
EPS (Rs)
% change
DPS (Rs)
CEPS (Rs)
FY12A
5177
12.7
761
-14.2
272
396
185
120
310
97.3
57
18%
254
-24
278
239.8
26
6.8
239.8
6.9
24.8
FY13A
8053
55.5
1169
53.7
428
609
368
91
319
3.0
-124
-39%
445
-12
458
64.7
40
11.2
64.7
1.2
25.7
Balance Sheet
FY14E
13173
63.6
2044
74.8
621
1253
819
127
561
75.7
84
15%
479
0
479
4.7
41
11.8
4.7
1.1
31.2
FY15E
17312
31.4
2907
42.2
741
1959
950
159
1168
108.1
292
25%
878
0
878
83.2
41
21.5
83.2
1.1
44.8
FY16E
21122
22.0
3694
27.1
853
2596
1064
190
1723
47.5
482
28%
1242
0
1242
41.5
41
30.5
41.5
1.1
57.4
Cash flow
Y.E March (Rs mn)
Net inc. + Depn.
Non-cash adj.
Changes in W.C
C.F.O
Capital exp.
Change in inv.
Other invest.CF
C.F - investing
Issue of equity
Issue/repay debt
Dividends paid
Other finance.CF
C.F - Financing
Chg. in cash
Closing cash
No. of shares(mn)
Y.E March (Rs mn)
Cash
Accounts Receivable
Inventories
Other Curr. Assets
Investments
Gross Fixed Assets
Net Fixed Assets
CWIP
Intangible Assets
Def. Tax (Net)
Other Assets
Total Assets
Current Liabilities
Provisions
Debt Funds
Other Liabilities
Equity Capital
Reserves & Surplus
Shareholder’s Fund
Total Liabilities
BVPS (Rs)
FY12A
209
270
79
1690
6
4016
2621
876
106
-106
273
6024
1186
103
1765
139
299
2532
2830
6024
108
FY13A
330
425
107
2977
16
7473
5718
1453
4242
10
600
15880
2364
144
6090
854
396
6031
6427
15880
162
FY14E
767
722
191
3934
17
9198
6822
1853
4198
10
660
19172
3147
180
7440
809
407
7190
7596
19172
186
FY15E
603
1043
265
5170
17
11098
7981
2103
4116
10
726
22033
4051
261
8390
909
407
8019
8423
22033
207
FY16E
1351
1331
341
6308
17
12598
8628
2353
3996
10
798
25133
4851
318
9340
1009
407
9213
9615
25133
236
FY12A
FY13A
FY14E
FY15E
FY16E
14.7
7.6
5.4
9.0
7.1
14.5
7.6
5.7
9.9
6.5
15.5
9.5
3.6
6.8
7.7
16.8
11.3
5.1
11.0
8.3
17.5
12.3
5.9
13.8
8.9
20.1
4.6
73.4
1.7
0.4
15.8
4.2
80.5
1.5
0.3
15.9
4.1
76.4
1.7
0.5
18.6
4.8
75.9
1.6
0.4
20.5
5.2
76.9
1.8
0.6
1.2
0.8
2.1
0.7
1.4
0.7
1.7
1.0
1.6
0.8
1.5
1.1
1.7
0.8
2.1
1.1
1.8
0.9
2.4
1.0
4.1
28.0
70.4
4.5
3.2
21.9
42.7
3.0
2.0
13.2
40.8
2.6
1.6
9.6
22.3
2.3
1.4
7.8
15.7
2.0
Ratios
FY12A
525
118
-152
491
-1418
957
-569
-1031
-66
427
-150
-207
3
-536
209
25.9
FY13A
871
103
556
1530
-2390
-340
-5292
-8021
3820
3278
-60
-425
6612
121
330
39.6
FY14E
1098
859
-517
1440
-2250
-60
127
-2184
739
1350
-46
-864
1180
436
767
39.9
FY15E
1617
996
-648
1965
-2275
-66
159
-2182
0
950
-47
-850
54
-164
603
40.7
FY16E
2094
1116
-644
2566
-1875
-73
190
-1757
0
950
-47
-964
-60
749
1351
40.7
Y.E March (Rs mn)
Profitab. & Return
EBITDA margin (%)
EBIT margin (%)
Net profit mgn.(%)
ROE (%)
ROCE (%)
W.C & Liquidity
Receivables (days)
Inventory (days)
Payables (days)
Current ratio (x)
Quick ratio (x)
Turnover & Levg.
Gross asset T.O (x)
Total asset T.O (x)
Int. covge. ratio (x)
Adj. debt/equity (x)
Valuation ratios
EV/Sales (x)
EV/EBITDA (x)
P/E (x)
P/BV (x)
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Recommendation Criteria:
The recommendations are based on a 12 month horizon, unless otherwise specified. The recommendations are on absolute
positive/negative return basis. It is possible that due to volatile price fluctuation in the near to medium term there could be a
temporary mismatch between the analyst recommendation and the actual absolute returns based on the current market price.
BUY
Accumulate*
Hold
Sell
-
Absolute
Absolute
Absolute
Absolute
return of more than 18%.
returns between 10% - 18%.
returns between 0% - 10%.
returns of less than 0%.
*Accumulate is a better rating than SELL and HOLD, but lower than BUY recommendation. Clients are advised not to sell their holding in the stock and buy the stock
whenever the stock provides a suitable price correction. The Analyst has a positive outlook about the company’s business model; hence the stock is recommended to
be bought over a period in a SIP (Systematic Investment Plan) fashion. Analyst has not given a BUY rating for reasons of premium valuations/clarity/events etc and
may revisit rating at appropriate time. Please note that the stock always carries the risk of being downgraded to a HOLD or SELL recommendation on outcome of
adverse events.
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