Buy PVR; target of Rs 760: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' report on PVR

"PVR is all set to buy DT Cinemas for INR5bn subject to CCI approval. Key attributes of DT Cinemas include: (i) ATP of INR250 (versus overall INR177 of PVR) as its properties are situated in prime locations; (ii) SPH of ~INR95-100, which can increase to INR120-130 (similar to PVR’s SPH in NCR); and (iii) the company’s 39 screens have high potential to increase advertising revenues (currently under monetised). Although EV/screen of INR128mn (versus replacement cost of INR15-25mn) appears expensive, ~12x FY17E EV/EBITDA seems comparable to the Inox-Satyam deal (at 15-16x trailing EV/EBITDA). Weak Q4FY15 results saw the stock correct by ~14% from peak levels which could reverse given its strong content pipeline in FY16. Tanu Weds Manu Returns has done well and Jurassic World has started on a promising note. The company is well placed to reap benefits of sector consolidation, expansion, urban revival and possible implementation of GST. Maintain ‘BUY’.

"We remain enthused by PVR’s dominance and expansion in exhibition business. With this acquisition, the company will enhance its market share in all key cities, which will drive growth once consumption picks up. At CMP, the stock is trading at 28.9x and 21.2x FY16E and FY17E EPS. We maintain ‘BUY/SP’ with target price of INR760", says Edelweiss research report.

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