Accumulate PVR; target of Rs 251: KRChoksey

KRChoksey is bullish on PVR and has recommended accumulate rating on the stocks with a target of Rs 251 in its November 7, 2012 research report.

“PVR reported strong revenue growth of 36.5% YoY to Rs 19.8crs as footfalls increased by 28% YoY and ATP showed healthy growth of 10% over Q2FY12 to Rs 167. F&B spend also increased by 13% YoY to Rs 46. Advertising income continued its upward trend and increased by 14% to Rs 18.9crs. Bowling alley segment showed revenue growth of 134% YoY to Rs 8.7crs. 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. We expect strong revenue growth in multiplex business driven by increase in occupancy and higher ARPU.”

“Q2FY13 was an all round quarter for PVR as the company has reported better than expected growth in footfalls and ARPU. Q3FY13 would again drive numbers upward as festive season is around the corner and big budget movies are lined up. We have revised our earnings estimates and we believe that margins will inch up further driven by cost rationalization. At current price, the stock is trading at 11.2x PE to its FY14E earnings. We maintain accumulate on the stock with a target price of Rs 251,” says KRChoksey research report.

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