Neutral PVR; target of Rs 1650: Motilal Oswal

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Motilal Oswal's research report on PVR

Hit by the Omicron COVID wave, the recovery process in PVR paused in 4QFY22, with flat admits QoQ and a 10% revenue miss (down 14% QoQ). Subsequently it again posted an operating loss and a net loss. ATP/SPH sustained at healthy levels of INR242/122, ~20 above pre-COVID levels. - A recovery in occupancy, a healthy ATP on an exit basis, and a strong movie pipeline are key positives. A return to the exclusives screening window of eight weeks for Hindi movies by Jul’22 would allay the risk posed by OTT platforms. We largely maintain our estimates and Neutral rating.

Outlook

We expect the business to normalize in FY23, with a 57% growth in EBITDA over FY20 levels. The rich valuation it commanded historically may contract, given the slower than earlier growth and risk posed by OTT platforms. We value PVR at 12x FY24E EBITDA to arrive at our TP of INR1,650. We maintain our Neutral rating.

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