Sunday, July 3, 2016

PVR LTD: IT'S JUST THE BEGINNING !!

*As the author of this blog I disclose that I do hold PVR LTD in my investment portfolio.

Scrip Code:532689/ PVR

CMP: Rs. 1024.50; Market Cap: Rs. 2,477.92 Cr; 52 Week High/Low: Rs. 1074.00 / Rs. 632.25.

Total Shares: 4,66,86,938 shares; Promoters : 1,20,11,149 shares –25.73 %; Total Public holding : 3,46,75,789 shares – 74.27 %;

Total Debt: Rs. 747.01 Cr;

PVR LTD:

Investment Rationale:

Priya Village Roadshow (PVR) Cinemas

PVR MILAP, Kandivali, Mumbai

PVR is the largest and the most premium film entertainment Company in India and is listed as the “Most Trusted Brand” in the Category of Entertainment by the “Brand Trust Report, 2013”. PVR, a pioneer in multiplex in India and is the largest cinema exhibition player in the country today. PVR was the pioneer in opening of the first multiplex in India and this opened up a new era in the Indian cinema viewing experience, which also set a role model for others to follow suit. PVR has set new benchmarks in the cinema exhibition business including establishment of the first largest 11 screen multiplex in the country, Gold Class Cinema, luxury cinema, IMAX theatres and ECX (Enhanced Cinema Experience). PVR has an impressive market share of around 25 % including Cinemax of the total 1600 multiplex screens in the country. Recently on June 29, 2016, the Union Cabinet cleared the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016. This law will allow shops, malls and cinema halls, among other establishments to run 24×7 throughout the year. It covers establishments employing 10 or more workers except manufacturing units and will provide freedom to operate 365 days with flexibility on timing to open and close.

Moreover, a gradual recovery in economic activity will increase disposable incomes to keep growth buoyant. , 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.

KEY FINANCIALS	FY15	FY16E	FY17E	FY18E
SALES (₹	1,476.90	1,873.60	2,178.60	2,515.50
NET PROFIT (₹ Cr)	13.30	125.40	140.90	157.10
EPS (₹)	3.20	26.90	30.30	33.80
PE (x)	261.90	31.30	27.70	24.90
P/BV (x)	7.80	4.30	3.70	3.30
EV/EBITDA (x)	21.50	13.70	11.50	9.80
ROE (%)	2.90	18.50	14.40	14.20
ROCE (%)	7.20	15.20	16.30	15.80

As I always say, I am a long term believer in markets & I do respect the markets and will keep a on every purchase. (Why Strict stop loss of 8 % ?) -

*As the author of this blog I disclose that I do hold PVR LTD in my of the portfolios.

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