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Analyst Research Report Snapshot


PVR Ltd. (PVRL) - Qtr. Update - Dated - May 30, 2014




Axis Capital Limited


30 May 2014





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PVR’s (Bloomberg: PVRL IN) Q4FY14 operational performance was in line with our expectations. Synergies from Cinemax acquisition benefited PVR through higher F&B spend (up 29%) and steep rise in advertisement/ sponsorship revenue (up 44%) in FY14. Management expects these benefits to continue and drive 18-20% growth in its ad revenue. We remain positive on PVR’s ability to monetize rising footfalls (led by the company’s screen expansion plans), given its dominant market share and geographical presence. Maintain BUY with TP of Rs 650 (18x FY16E EPS of Rs 36), implying 12% upside from CMP of Rs 578. The stock trades at PE of ~27x FY15E EPS of Rs 21.7 and 16x FY16E EPS of Rs 36. Strong operational performance  Being a seasonally weak quarter, PVR reported revenue of Rs 3.1 bn, and EBITDA of Rs 331 mn (EBITDA margin of 10.5%); adjusted PAT stood at Rs 82 mn given one-time adjustments for (a) profit on sale of Anupam property, (b) discontinuation of one of the properties and (c) higher amortization of goodwill in the quarter  On a comparable basis, ticket sales grew 21% YoY, F&B revenue grew 46% YoY, and advertising/ sponsorship revenue grew 48% YoY in Q4FY14  PVR’s footfalls increased 9% to ~60 mn, while Average Ticket Price grew 4% to Rs 168 in FY14 (Rs 162 in FY13)  It added 70 screens (421 screens in FY14); Management has guided to add 60-70 screens each in FY15 and FY16. PVR also plans to refurbish ~50 Cinemax screens (capex of Rs 500 mn over next 2-3 years) Regards, Chirag Negandhi (MD & Co - Head of Research) chirag.negandhi@axiscap.in; 91 22 4325 1106 Ankur Periwal (VP - Media) ankur.periwal@axiscap.in; 91 22 4325 1118

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