Buy PVR; target of Rs 148: KRChoksey

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Buy PVR; target of Rs 148: KRChoksey

KRChoksey is bullish on PVR and has recommended buy rating on the stock with a target of Rs 148 in its August 11, 2011 research report.

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KRChoksey is bullish on PVR and has recommended buy rating on the stock with a target of Rs 148 in its August 11, 2011 research report.

"Q1FY12 was a good quarter for PVR Ltd. The company reported net sales of Rs 117cr which is up by 14% over y-o-y and q-o-q. EBITDA stood at Rs 20cr against Rs 16cr, a whopping increase of 29% over same period last year. EBITDA margin for the quarter was 20%. PVR had an exceptional item of Rs 12.cr which was derived by income in sale of investment in a subsidiary. Net profit for the quarter was 15cr. Net profit margin for the quarter was 13.2%. PVR has shown substantial growth on occupancy front post IPL. Also bowling alley segment has grown at a healthy rate. However company's home production 3 The Bhai dented net profit. We believe going forward with good slate of movies, occupancy to sustain at current level. Sustained ATP and F&B, opening of Bowling alley in Delhi and no major investment in film production segment give visibility to strong revenues going forward."

"PVR had muted occupancy of 20% in Q4FY11. However in this quarter the company reported occupancy of 29% on the back of good blockbuster movies like Ready, Double Dhamal, Pyaar ka Panchanama, Hangover II, etc. Growth in occupancy coupled with 3% growth in ATP to Rs 162 lead to healthy in net sales. We believe there is still room for increase in occupancy from current level. F&B Spend per head has increased substantially in this quarter to Rs 43.7. With 50 odd screens to be operational in FY12 & FY13 and growth in ATP & F&B spend ensure healthy growth in revenues. In Q1FY12 bowling alley contributed Rs 4cr with EBITDA of Rs 1.5cr. This segment had EBITDA margin of 38%. PVR has 26 lanes bowling alley in Delhi and 28 lanes bowling alley in Bangalore under pipeline for FY12. Also 2 more bowling alleys in Pune and 1 more in Delhi are on the card for FY13. The management expects this segment to contribute Rs 100cr a year going forward."

"After dismal occupancy in Q4FY11, the company is back on the growth track. With expansion plans in tact, increasing occupancy and spend per head, growth in bowling alley business, we believe the company will grow at healthy rate. At current market price the stock is trading at 12x and 16x p/e for FY12E and FY13E. We maintain our BUY recommendation on the stock with a target price of Rs 148 by assigning 20x p/e to eps earnings of Rs 7.4 for FY13E," says KRChoksey research report. 

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