Angel Broking neutral on PVR

Angel Broking has maintained neutral rating on PVR in its November 9, 2012 research report.

“PVR’s For 2QFY2013, PVR posted an impressive top-line growth of 37.4% yoy to Rs189cr mainly on account of a 37.8% yoy growth in its movie exhibition business to Rs176cr. On the bottom-line front, PVR reported a healthy 13% yoy growth in adjusted profit to Rs16cr in spite of 126bp yoy contraction in OPM to 19.0%. The reason for OPM contraction is the impact of service tax on lease rentals to the tune of Rs2.5cr booked in the quarter and increase in expenses on account of film distribution share, up by 45.7% yoy to Rs51cr (since higher number of movies were distributed in the quarter -7 vs 5 in 2QFY2012).”

“PVR recorded an 11% yoy growth in footfalls to 7.5mn for comparable properties. Overall, footfalls grew by 29% yoy to 8.7mn aided by robust seat additions over the last few quarters. The average ticket price (ATP) grew by 11% yoy to Rs169. The healthy growth in footfalls and ATP led to a 39% yoy increase in ticket sales to Rs117cr. Amongst other segments, sale of food and beverages (F&B) registered a growth of 50% yoy to Rs37cr as the company is experimenting with various schemes such as flexi food prices. Advertisement income grew by 14% yoy to Rs19cr while bowling alley income grew by an impressive 134% to Rs9cr (albeit on a smaller base).”

“For FY2012-14E, we expect PVR to register a ~20% CAGR in its top-line, aided by robust seat additions. At the CMP of Rs235, the stock is trading at 12.6x FY2014E EPS. We believe the stock is richly valued and offers limited upside from the CMP. Hence, we maintain a neutral view on the stock,” says Angel Broking research report.

Public holding more than 90% in Indian cos

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