Buy PVR Ltd; target of Rs 1760: Motilal Oswal

Motilal Oswal's research report on PVR Ltd

PVR’s revenue increased 5% YoY to INR5,573m (est. of INR6,184m) in 3QFY18. EBITDA rose 25% YoY to INR1,003m (est. of INR1,218m), with the margin expanding 290bp YoY to 18% (est. of 19.7%) due to a 90bp reduction in rent cost (to 17.8% of net sales) and a 440bp reduction in administrative & other expenses (to 22.5% of net sales). Adjusted PAT stood at INR289m in 3QFY18 (est. of INR403m) v/s INR239m in 3QFY17.

Outlook

We, however, cut FY19E/20E earnings by 13%/11% due to multiple changes in tax rates impacting film hire charges. We value the stock at 14x FY20E EV/EBITDA and maintain our Buy rating with a target price of INR1,760. For all recommendations report, click here

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