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Accumulate PVR; target of Rs 2131: Prabhudas Lilladher

October 18
18:25 2019

Prabhudas Lilladher’s research report on PVR

We keep our top-line & EBITDA estimates broadly unchanged but cut our PAT estimates (Ind-AS adjusted) by 6%/18% for FY20E/FY21E as PVR has decided to pay tax at the regular tax rate of 35% in order to utilize the MAT credit of ~Rs800mn available as of 30th Sep 2019. This was an excellent quarter for PVR with top-line increasing 37.3% YoY to Rs9,732mn (PLe of Rs8,832mn) buoyed by strong content (4/5movies crossed Rs1bn in box office collections). Ind-AS adjusted EBITDA margin expanded 250bps YoY to 20% and is the best ever margin performance since 1QFY16. Given 1) strong content pipeline 2) leadership position (~28% screen market share) and 3) aggressive screen addition plans (we expect 70/75 screen additions in FY20E/21E) we expect sales/Ind-AS adjusted EBITDA to grow at a CAGR of 17.2%/22.8% over FY19-21E.

Outlook

We assign EV/EBITDA multiple of 10x to our FY21E EBITDA of Rs14.6bn and arrive at a TP of Rs2,131 (earlier Rs2,099). Retain ACCUMULATE.

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