MOSL: PVR (Buy)-Good show! Outlook buoyant too
PVR: Good show! Outlook buoyant too
(PVRL IN, Mkt Cap USD0.8b, CMP INR1121, TP INR1565, 40% Upside, Buy)
- Healthy revenue drives EBITDA outperformance: revenue grew 9% YoY to INR6,963m (in-line), primarily led by healthy growth in exhibition revenue (INR68,444m, +11% YoY). EBITDA increased 22% YoY to INR1,372m (9% beat), mainly led by revenue growth, partly offset by a 7% YoY increase in opex. Consequently, EBITDA margin expanded 210bp YoY to 19.7%. PAT increased 17% YoY to INR522m (15% beat).
- Higher footfalls drive exhibition revenue: Footfalls increased 8% YoY to 22.7m, leading to an 80bp YoY uptick in the occupancy rate (35.9%). This, coupled with a 1% YoY increase in ATP (INR217), drove 12% YoY growth in net box office revenue to INR3,849m. Food & beverages revenue increased 23% YoY to INR2,027m on the back of higher footfalls and a 9% rise in spend per head (INR94).
- Concall highlights: (1) Expect 90 screens to be added in FY19. 20-25 screen adds expected in 2Q/3QFY19. (2) FY19 occupancy rate is expected to be higher, led by a healthy content pipeline. (3) Expect 18-20% advertising revenue growth in FY19. (4) PIL filed with MP High Court for controlling prices and allowing outside F&B in cinemas was dismissed.
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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