Hold PVR; target of Rs 1540: ICICI Direct

ICICI Direct's research report on PVR

ATP growth for the quarter grew 6.5% YoY to | 212 in line with our expectations, aided by the star studded release of Tiger Zinda Hai, Golmaal Again and Judwaa 2 during the quarter. Footfalls declined 2.8% YoY to 17.4 million (mn), in line with our expectations, on account of content heavy base (Dangal, MS Dhoni, Ae Dil Hai Mushkil, etc.). Spend per head (SPH) grew 12% YoY to RS 92. Net box office collections came in at RS 293.1 crore, up 8.9% YoY, aided by strong growth in ATP. F&B revenues came in at RS 143.8 crore, up 6.6% YoY, driven by SPH growth. Ad revenues at RS 86.7 crore were up 10.6% YoY (our estimate: 10% YoY growth)

Outlook

The valuation gap, we believe, is steep and is likely to narrow further as Inox catches up with ad revenue growth. Consequently, we continue to prefer Inox over PVR. We maintain our HOLD recommendation on PVR. We roll over our valuations to FY20 and value it at 15x FY20E EV/EBITDA, arriving at a target price of RS 1540. For all recommendations report, click here

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