MOSL: PVR (Buy)-Strong screen additions to aid growth momentum
PVR: Strong screen additions to aid growth momentum
(PVRL IN, Mkt Cap USD1.0b, CMP INR1461, TP INR1760, 20% Upside, Buy)
- Results below estimates; margin expands 290bp YoY: PVR’s revenue increased 5% YoY to INR5,573m (est. of INR6,184m) in 3QFY18. EBITDA rose 25% YoY to INR1,003m (est. of INR1,218m), with the margin expanding 290bp YoY to 18% (est. of 19.7%) due to a 90bp reduction in rent cost (to 17.8% of net sales) and a 440bp reduction in administrative & other expenses (to 22.5% of net sales). Adjusted PAT stood at INR289m in 3QFY18 (est. of INR403m) v/s INR239m in 3QFY17.
- Screen additions on track; focus on increasing presence in south India: PVR added 36 screens in 9MFY18, with another 31 screens scheduled to be added in 4QFY18 (28 of which will be in south India). 67% of overall screen additions in FY18 are expected to be in south India, in line with PVR’s strategy to boost penetration in the region. South accounts for 23% of PVR’s total number of screens, which is expected to rise 320bp to 26.4% by FY18.
- ‘Padmavat’ row impacts quarter; 4Q expected to make up: 3QFY18 witnessed a loss of business for ~3 weeks on account of a delay in the release of the eagerly awaited movie ‘Padmavat’, significantly impacting footfall (-3% YoY to 17.4m). With ‘Padmavat’ now released and also a strong content pipeline ahead, the company is expected to make up for the loss in footfall and occupancy, providing a boost to sponsorship revenue.
PVR Limited is an India-based holding company. The Company is a film entertainment company, which is engaged in the motion picture exhibition in cinemas. The Company has organized its operations into three business segments: Movie exhibition, Movie Production & Distribution, and Others. Its Others segment includes bowling, gaming and restaurant. The Company is also engaged in in-cinema advertisements/product displays and sale of food and beverages at cinema locations. The Company offers technologies, including 4DX Technology, which stimulates the senses with effects, such as seat motion, wind, rain, fog, lights and scents to match the audio and video in both two-dimensional (2D) and three-dimensional (3D); IMAX, which provides a viewing technology with optimized sound and projection system, and Playhouse, which is designed for kids. The Company operates a network of approximately 550 screens spread over 120 properties in approximately 50 cities across the country.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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