Buy PVR; target of Rs 1850: Motilal Oswal

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Motilal Oswal 's research report on PVR

3Q was the first quarter with full three months impact of SPI Cinemas consolidation. Including SPI Cinemas, consol. revenue was up 51% YoY to INR 8.4b (6% beat). EBITDA surged 62% YoY to INR1.6b (11% beat), with the margin expanding 130bp YoY to 19.5%. PAT grew 79% YoY to INR518m (29% beat). However, excluding SPI Cinemas, revenue was up 27% YoY to INR6,949m, driven by strong growth across segments, while EBITDA/PAT grew 40%/62% YoY.

Outlook

At CMP, the stock trades at EV/EBITDA of 13.2x/11.4x FY20/21E EBITDA. Thus, attractive valuation, an upbeat earnings outlook and a fillip in return ratios augur well for PVRL. Maintain Buy with a TP of INR1,850, ascribing 13x (three-year average) to FY21E EBITDA.

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