MOSL: PVR (Buy)-Higher ATP drives earnings in 4QFY18-Aggressive screen additions bode well for future growth
PVR: Higher ATP drives earnings in 4QFY18; Aggressive screen additions bode well for future growth
(PVRL IN, Mkt Cap USD1.0b, CMP INR1424, TP INR1760, 24% Upside, Buy)
- Increase in ATP boosts earnings: Consol. revenue grew 21% YoY to INR5,849m (in-line), primarily led by a 9% YoY increase in the average ticket price (ATP) to INR206, partly offset by a 2% YoY dip in footfall to 15.6m. Consol. EBITDA doubled YoY to INR944m (21% beat), with the margin expanding ~650bp to 16.1% (280bp beat). PAT stood at INR262m (est. of INR59m) v/s INR1m in 4QFY17. For FY18, revenue grew 10% to INR23,341m (in-line), EBITDA increased 28% to INR4,018m (6% beat) and PAT rose 30% to INR1,248m (21% beat).
- Concall highlights: 1) Management expects to roll out 90+ screens in FY19. 2) ATP is expected to grow at ~4-5% in FY19 (in line with inflation). 3) Advertisement revenue is expected to grow at 15-20%. 4) Capex for FY19 is likely to be in the range of INR4,000-4,500m.
- Aggressive screen additions to drive growth: In FY18, PVR added 49 screens (organically), taking the total screen count to 625. Moreover, 23 screens are ready for launch (awaiting licenses), while 53 screens are under construction and expected to be rolled out over the next 6-8 months. Aggressive screen additions in FY19/20, coupled with rising ATP and a healthy movie pipeline, bode well for PVR. Besides this, we expect the strong momentum in ad revenue growth (~20% YoY in FY18) to continue driving growth
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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