August 03, 2016 / 15:14 IST
Motilal Oswal's research report on PVR
Revenue and EBITDA margins in line with estimates: PVR reported overall revenues of INR 5.7b for 1QFY17 (est. of INR 5.4b), marking 17% YoY growth. PVR added 29 DT Cinemas screens during the quarter, taking the total count to 551 screens in 1QFY17. It aims to surpass 600 screens by the end of this year. EBITDA margins declined from 22.8% in 1QFY16 to 20.5% in 1QFY17 (est. of 20.7%), primarily driven by lower LTL growth of 6% as some blockbusters movies were released during the base quarter. Consequently, adj. PAT came in at INR 444m (est. of INR 445m), down from INR 458m in 1QFY16.
We expect 19% revenue CAGR and 25% EBTDA CAGR over FY16-18. We expect overall EBITDA margins to improve from 17.7% in FY16 to 19.5% in FY18, mainly driven by synergies from its integration with DT Cinemas, while GST implementation can expand EBITDA margins by 440bp (assuming 18% GST rate). We continue to maintain our estimates and value PVR at 13x FY18E EV/EBITDA. Maintain Buy with a target price of INR 1,330.
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