Angel Broking neutral on PVR

Angel Broking's report on PVR

"PVR reported a 14.9 percent yoy decline in footfalls to 7.4mn for comparable properties on a standalone basis due to only 3 big hits (Ram Leela, Krrish 3 and Dhoom 3) in the quarter compared to 7 big hits in 3QFY2013. Moreover, many big movies such as R Rajkumar, Besharam, Boss and Bullet Raja underperformed expectations at the box office. However, ticket sales grew by 12.6 percent yoy to Rs 136cr due to 5.8 percent yoy growth in average ticket price (ATP) to Rs 183. For Cinemax, ticket sales declined by 23.0 percent yoy to Rs 61cr for comparable properties, mainly on back of a 22 percent yoy decline in footfalls to 4.6mn and flat yoy growth in average ticket price (ATP) to Rs 162."

"PVR has already added 56 screens in 9MFY2014 itself and plans to add another 24 screens in 4QFY2014. The robust organic expansion is set to continue with the company planning to add another 50-70 screens by end of FY2015, taking the total tally of screens near 500 by end of FY2015."

Outlook and valuation: "PVR is expected to register robust revenues on incremental earnings from its newly opened properties, cost savings due to synergies from Cinemax’s acquisition and an impressive movie pipeline. However, high debt remains a key concern. At the current market price, the stock is trading at 22.0x FY2015E EPS. We believe the stock offers limited upside from the current market price. Hence, we recommend a Neutral view on the stock," says Angel Broking research report.

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