Hold PVR; target of Rs 1810: ICICI Direct

ICICI Direct recommended hold rating on PVR with a target price of Rs 1810 in its research report dated July 26, 2019.

Broker Research

July 26, 2019 / 15:59 IST

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Direct's research report on PVR

PVR’s Q1FY20 topline beat was aided by better-than-expected growth in F&B and advertisement. F&B revenues at Rs 260.4 crore, up 28.4% YoY, were higher than expected 15% growth led by SPH growth of 17% YoY. Advertisement revenues grew 28% YoY, better than our expectation of 25% YoY. EBITDA (without impact of Ind-AS116) came in at Rs 158.7 crore, with margins of 18%, largely in line with our estimates. On a reported basis, EBITDA was at Rs 279 crore. Margins of 31.6% as rent are now charged under depreciation and interest under Ind-AS 116. PAT (without impact of Ind-As116) came in at Rs 44 crore, a tad better than our expectation of Rs 39.9 crore. However, given the straight lining of rental as depreciation and interest in initial year under Ind-As, reported PAT was at Rs 16.2 crore.

Outlook

PVR remains a key beneficiary of the thriving multiplex industry. However, valuations at 9.5x FY21 EV/EBITDA at on the higher end. We maintain our HOLD recommendation and value it at 10x FY21E EV/EBITDA. Hence, we arrive at a revised target price of Rs 1810. We continue to prefer Inox over PVR, given the former lower valuations with relatively better balance sheet and comparable growth trajectory.

For all recommendations report, click here