MOSL: PVR (Buy)-Strong pace of screen addition continues
PVR: Strong pace of screen addition continues
(PVRL IN, Mkt Cap USD1.1b, CMP INR1723, TP INR1950, 13% Upside, Buy)
- Robust box office/F&B revenue drives growth: Continuing its strong momentum, PVRL (ex-SPI) reported robust revenue/EBITDA growth of 28%/50% YoY to INR7,239m/INR1,416m on the back of healthy net box office and F&B revenue. Further, consolidation of SPI Cinemas led to 43% YoY jump in consol. revenue to INR8,376m (10% beat). Consol. EBITDA at INR1,608m, grew 70% YoY (15% beat); margins expanded 310bp YoY to 19.2% due to operating leverage benefits. Consol. PAT grew 78% YoY to INR467m (58% beat). FY19 consol. revenue/EBITDA/PAT was up 32%/46%/47% YoY.
- Concall highlights: (1) Expect 80-100 new screens in FY20. (2) Expect double-digit ad growth in FY20. (3) FY20 SPH should see growth similar to that in FY19 (+2% YoY). (4) FY20 capex guidance stands at INR5-6b.
- Outlook remains buoyant: (a) Strong traction for non-superstar movies (evident in 4Q), (b) cut in GST rates on movie tickets, and (c) healthy 80-100 screen additions annually (as guided by management) should drive overall admits, and in-turn, healthy box office/F&B revenue (despite steady ATP/SPH). Consequently, we expect healthy 14% consol. revenue CAGR over FY19-21 (we largely maintain our estimates). This coupled with operating leverage benefits and synergies from SPI Cinemas should drive consol. EBITDA CAGR of 15% over the same period.
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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