Accumulate PVR; target of Rs 143: Angel Broking

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Accumulate PVR; target of Rs 143: Angel Broking

Angel Broking is bullish on PVR and has recommended accumulate rating on the stock with a target of Rs 143 in its October 24, 2011 research report.

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Angel Broking is bullish on PVR and has recommended accumulate rating on the stock with a target of Rs 143 in its October 24, 2011 research report.

"PVR reported impressive performance in 2QFY2012 on the earnings front. The company's revenue grew by 2.5% yoy and by impressive 18.1% sequentially. OPM declined by 434bp yoy due to high rental costs, though it improved on a qoq basis due to healthy top-line growth. PAT during the quarter grew by 58.2% yoy, but declined sequentially. 1QFY2012 had an exceptional item from sale and lease back of Phoneix Mills property."

"Occupancy increased to 36% in 2QFY2012 from 30% in 2QFY2011. ATP decreased by ~5% yoy during the quarter to Rs 152. Footfalls increased to 7.1mn in 2QFY2012 from 5.7mn in 2QFY2011. Despite a 434bp yoy operating margin expansion, recurring earnings for the quarter came in at Rs 14cr due to low depreciation and amortization costs. Also, the quarter witnessed an increase in food and beverage (F&B) spends by 158bp yoy to Rs 9.2cr (Rs 6.8cr) and higher share of film distributors to Rs 35cr (Rs 28cr). During the quarter, the company opened the much-awaited second bowling alley under its brand PVR Blu'O in Vasant Kunj, New Delhi."

"For FY2011-13E, we expect PVR to register a ~13% CAGR in its top line, aided by seat additions and higher contribution from bowling alleys. Earnings are expected to register a CAGR of 80% over the same period on account of low base and an impressive movie pipeline. Also, the company's decision to concentrate on its core business will lead to improved earnings going forward. Also, big ticket releases such as Ra.One and Rockstar in 3QFY2012 could keep earnings momentum strong in the near term. At the CMP of Rs 128, the stock is trading at 11.4x FY2013E EPS. We recommend Accumulate on the stock with a target price of Rs 143," says Angel Broking research report.

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