MOSL: PVR (Buy)-Strong quarter, outlook remains buoyant
PVR: Strong quarter, outlook remains buoyant
(PVRL IN, Mkt Cap USD0.8b, CMP INR1284, TP INR1650, 28% Upside, Buy)
- Healthy revenue drives EBITDA outperformance: Excluding SPI Cinemas consolidation, revenue grew 16% YoY to INR6.5b in 2QFY19, led by healthy growth in the movie exhibition business. Subsequently, EBITDA rose strongly by 21% YoY to INR1.1b, with the margin expanding 60bp to 16.9%. Including SPI acquisition, consol. revenue grew 28% YoY to INR7.1b (5% beat). Consol. EBITDA surged 37% YoY to INR1.2b (11% beat), with the margin expanding 120bp YoY to 17.5%. Adj. PAT increased 30% YoY to INR330m (2% beat).
- 1HFY19 performance: Revenue/EBITDA/adj. PAT grew 18%/29%/22% YoY in 1HFY19. EBITDA margin expanded 160bp YoY to 18.6%. For 2HFY19, we expect revenue/EBITDA/adj. PAT growth of 38%/51%/91% (incl. SPI consolidation).
- All levers moving: Excluding SPI, net box office revenue increased 17% YoY to INR3.5b, driven by (a) 14% YoY jump in footfalls (21.4m), leading to a 380bp YoY uptick in occupancy (33.4%) and (b) a 3% YoY rise in ATP to INR211. F&B revenue grew 25% YoY to INR1.8b, mainly on the back of volume growth. This is despite a 4% YoY decline in SPH to INR88. Advertising revenue rose 13% YoY to INR0.8b.
- Concall highlights: (1) In FY19, expect 90/8 new screen additions for PVR/SPI Cinemas. (2) Expect SPH in 2HFY19 to be 4-5% higher. (3) FY19 ad revenue growth guidance at 15%+ (previous guidance: 18-20%). (4) Company will own 100% of SPI Cinemas by end-3QFY19.
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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