Accumulate PVR; target of Rs 192: KRChoksey

KRChoksey is bullish on PVR and has recommended accumulate rating on the stock with a target of Rs 192 in its August 07, 2012 research report.

“PVR Ltd Q1FY13 result was above estimates and surprised us on strong revenue growth and improvement in margins front. Net sales stood at Rs 177.3crs, robust growth of 51% YoY led by both increase in footfalls and average ticket price. EBITDA for the quarter jumped by 65% YoY to Rs 33.8crs. Consequently EBITDA margins improved by 160bps to 19.1%. Higher depreciation and interest expenses eroded net profit by 46% YoY to Rs 7.8crs. Net profit margin declined by 790bps to 4.4%. L Capital will invest Rs 101crs in PVR’s exhibition and gaming business. The company has robust expansion plans for both its multiplex and gaming segments. Higher ARPU and increase in footfalls support our healthy top line growth. Cost rationalization will further improve operating margin. Maintain Accumulate.”

“PVR reported strong revenue growth of 51% YoY on account of higher footfalls and increase in spend per head. The company witnessed 36% YoY increase in footfalls to 7.5mn as compared to 5.5mn in Q1FY12. ATP declined by marginal 1% to Rs 162. However SPH showed healthy growth of 10% YoY to Rs 48.4. Bowling alley also showed moderate growth of 7% YoY to Rs 7.3crs. The management has reiterated growth in ATP going ahead. PVR plans to rollout 80 new screens each year for next 2 years. The management said focus will be on tier II cities as they will contribute more to growth going ahead. On bowling alley front, 4 new centers will be added in FY13E. This robust expansion plan will help increase occupancy for both exhibition and gaming business.”

“PVR has strong screen roll out plan across which will increase footfalls going forward. Improvement in ATP and SPH will boost revenues. At current price, the stock is trading at 10.1x PE to its FY14E earnings. We recommend Accumulate on the stock with a target price of Rs 192,” says KRChoksey research report. 

FIIs holding more than 30% in Indian cos

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