Feb 14, 2017 06:14 PM IST | Source: Moneycontrol.com
Sell PVR; target of Rs 1020: Axis Direct
Axis Direct is bearish on PVR has recommended sell rating on the stock with a target price of Rs 4020 in its research report dated February 09, 2017.
Axis Direct's research report on PVR
PVR (PVRL) recorded healthy operational performance in Q3despite adverse impact of demonetization. While occupancy rates took a hit (32% vs. 34% YoY; partially due to weak content as well), ATP^ was flat YoY at Rs 199 while SPH# grew 12% YoY to Rs 83 (+8% for comparable screens). This was partially led by attractive combo offers launched. Ad revenue grew impressive 13% YoY (in line with screen addition), significantly higher than 2% growth recorded by Inox Leisure.
While we like PVR for its strong geographical presence and ability to monetize footfalls (higher SPH/ ad revenue) in the medium term, we believe the near-term upside remains limited given the sharp stock price appreciation (up 14% in past month). Downgrade to SELL (HOLD earlier) on premium valuations (EV/EBITDA of 18x FY17E and 12.5x FY18E) with TP of Rs 1,020 (10x FY18E EV/EBITDA).
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