PVR MILAP, Kandivali, Mumbai
Moreover, a gradual recovery in economic activity will increase disposable incomes to keep growth buoyant. Footfalls at malls are high and Movies are still the number one format of entertainment in India. During the weekday/weekend footfalls split ratio is 50:50, and with new Shop ACT, PVR would be definitely be the winner. For PVR a 50-bp drop in the average occupancy ratio could affect the erosion in price of the stock by 5 % and similarly with this new act a 50 bps increase in occupancy ratio could result in increase in stock price by 5 %. On financial side, PVR Ltd.’s Q4FY16 consolidated revenue was better. ATP for Tier I cities were Rs. 200, Tier II cities Rs. 160 and Tier III cities Rs. 100. PVR initiated new idea like Launching organic popcorn, In house juice and coffee and merchandise for kids. As per management SPH to ATP can go as high as 80-100 %, E-commerce contribution remain in the range of 10 % to total ad revenue. PVR enjoys 30 % to 40 % ad rate premium over other operators. It plans to open up Director cut properties (premium offering) in Delhi-2, Banagalore-1, Pune-1 and Mumbai-1 Bluo- One more property to come up in Dec-16 in Jalandhar while no further expansion plans. Consolidated financials including DT cinema to come from Q2FY17. PVR is looking to screen addition of 60-65 screens/year. Already 8 screens are opened up in Q1FY17. For PVR, 50 % of incremental screen additions will happen in Tier 1 cities. PVR’s consolidated operating income grew 38 % y-o-y, but declined 18 % q-o-q, to Rs. 412.6 Cr. FY16 operating income grew 26.5 % to Rs. 1,873.6 Cr. EBITDA margin expanded 7.67 % y-o-y, but contracted 5.79 % q-o-q, to 11.3 %, due to better absorption of fixed costs. Rent as a percentage of sales contracted 4.27 % y-o-y to 18.4 %, and other expenses contracted 3.39 % y-o-y to 30.4 %. Following sturdy EBITDA growth and higher other income adjusted net loss narrowed to Rs. 7.3 Cr from Rs. 3.43 Cr in Q4FY15. FY16 adjusted PAT grew to Rs. 125.4 Cr from Rs. 14.9 Cr in FY15. Gross debt of PVR stood at Rs. 660 Cr as compared to Rs. 750 Cr in FY15, this includes Rs. 33.00 Cr of equipment related debt which was earlier part of operating lease and now accounted as finance lease. During the quarter, the ATP and footfalls improved 8 % and 26 % yoy, respectively. ATP for comparable properties improved 9 % yoy to Rs. 183. Occupancy stood at 28.7 % vs 27 % in Q4FY15. The company rolled out new 25 new screens during Q4FY16 and FY16 screen addition stood at 52. Movie production and distribution business stood at Rs. 22.8 Cr vs Rs. 13.6 in Q4FY15. Healthy content pipeline and new screen additions are expected to drive footfalls. Factors like new Modern Shop Establishment Act, improving multiplex penetration, increase content supply (both Bollywood and Regional) and improving content quality, would continue to drive footfalls. PVR’s premium location strategy, robust growth in F&B and advertisement, favouring macro factors like improving income levels and increase supply of content would continue to drive footfalls. Volatility in footfalls will remain with content performance, however, this get normalized over a longer period. At the current market price of Rs. 1024.25, the stock P/E ratio is at 38.08 x FY15E and 23.81 x FY16E respectively. PVR can post EPS of Rs. 30.30 for FY17E and Rs. 33.80 for FY18E. The content pipeline of the company is exciting and would propel the further growth of PVR. It is expected that the company’s surplus scenario is likely to continue for the next three years keeping its growth story in the coming quarters also.
|SALES (₹ Crs)||1,476.90||1,873.60||2,178.60||2,515.50|
|NET PROFIT (₹ Cr)||13.30||125.40||140.90||157.10|
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