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PVR Limited -Movie venture leads to losses...
PVR reported its Q3FY11 results that were a mixed bag. The topline at |
133.6 crore was better than our expectation of | 123.5 crore on the back
of higher revenue from the movie production business. Revenues
registered a YoY growth of 16.9% YoY. Revenue from production and
distribution stood at | 30.3 crore as compared | 15.1 crore in Q3FY10.
The company posted EBITDA of | 16.2 crore as compared to | 33.7 crore
in Q2FY11 and | 19.2 crore in Q3FY10. EBITDA margins stood at 16.2%,
down 875 bps QoQ and 63 bps YoY. The company reported a net loss of
| 4.8 crore (I-direct estimate of net profit of | 7.9 crore) due to higher
amortisation of | 24.8 crore on account of the movie business, which
reported a loss of | 17.8 crore.
ƒ Highlights of the quarter
This was a weak quarter for PVR as many big budget movies like
Action Replay, Khelein Hum Jee Jaan Sey, Guzaarish, No Problem
and Tees Mar Khan failed to perform. Occupancy fell to 27.7% as
compared to 36.8% in Q3FY10 (3 idiots and Ajab Prem Ki Ghajab
Kahani), while ATP increased 5% YoY to | 167 from | 159.
Exhibition revenues grew 5.0% YoY to | 103.2 crore as compared to
| 98.2 crore in Q3FY10. The company generated | 3.4 crore from the
bowling alley segment compared to | 3.2 crore in the same period
last year. PVR Pictures production “Khelein Hum Jee Jaan Sey” that
was released during the quarter fared poorly at the box office due to
which the company reported a loss of | 17.8 in the segment.
Valuation
The exhibition and bowling alley segment continued to perform on
expected lines. With seemingly good movies slated to release in the next
few months, we remain upbeat on the company’s performance. At the
CMP of | 127, the stock is trading at 24.5x FY11E consolidated EPS of |
5.2 and 16.1x FY12E EPS of | 7.9. We value the stock at 18x FY12E and
arrive at a target price of | 142, implying an upside of 12%. We reiterate
our rating on the stock as BUY. PVR is our top pick in the multiplex sector.
Result analysis
ƒ Occupancy declines while ATP is on the rise
Occupancy for the quarter declined to 27.7% as compared to 30.0%
in Q2FY11 and 36.8% in Q3FY10 as major big budget movies failed
to make an impact as compared to 3 idiots and Ajab Prem Ki Ghajab
Kahani in Q3FY10.
ƒ Other revenue segments
PVR Blu-O has been performing in line with the company’s
expectations. This segment reported revenues of | 3.4 crore as
compared to | 3.2 crore in Q3FY10. The management has indicated
that it will set up 80 new lanes by the end of FY12E.
PVR Pictures is in the business of film distribution and production.
The company released the movie Khelein Hum Jee Jaan Sey during
Q3FY11, which failed at the box office. Consequently, the company
reported an EBIT loss of | 17.8 crore in the segment. The company
has two movies “3 The Bhai” (Comedy) and “Shanghai” (Action)
slated for release in FY12. However, the management has guided for
restricting investment in the movie production business and focusing
on the distribution business
Outlook & Valuation
PVR has not had a good run with its home productions in the recent past.
It has reported a net loss of | 20.3 crore in the movie segment in 9MFY11.
The management has indicated at reducing its exposure to the movie
production and focusing more on the distribution business only. The
exhibition and bowling alley segment continued to perform on expected
lines. With seemingly good movies slated to release in the next few
months, we remain upbeat on the company’s performance.
At the CMP of | 127, the stock is trading at 24.5x FY11E consolidated EPS
of | 5.2 and 16.1x FY12E EPS of | 7.9. We have valued the stock at 18x
FY12E and arrived at a target price of | 142, implying an upside of 12%.
We reiterate our rating on the stock as BUY. PVR is our top pick in the
multiplex sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
PVR Limited -Movie venture leads to losses...
PVR reported its Q3FY11 results that were a mixed bag. The topline at |
133.6 crore was better than our expectation of | 123.5 crore on the back
of higher revenue from the movie production business. Revenues
registered a YoY growth of 16.9% YoY. Revenue from production and
distribution stood at | 30.3 crore as compared | 15.1 crore in Q3FY10.
The company posted EBITDA of | 16.2 crore as compared to | 33.7 crore
in Q2FY11 and | 19.2 crore in Q3FY10. EBITDA margins stood at 16.2%,
down 875 bps QoQ and 63 bps YoY. The company reported a net loss of
| 4.8 crore (I-direct estimate of net profit of | 7.9 crore) due to higher
amortisation of | 24.8 crore on account of the movie business, which
reported a loss of | 17.8 crore.
ƒ Highlights of the quarter
This was a weak quarter for PVR as many big budget movies like
Action Replay, Khelein Hum Jee Jaan Sey, Guzaarish, No Problem
and Tees Mar Khan failed to perform. Occupancy fell to 27.7% as
compared to 36.8% in Q3FY10 (3 idiots and Ajab Prem Ki Ghajab
Kahani), while ATP increased 5% YoY to | 167 from | 159.
Exhibition revenues grew 5.0% YoY to | 103.2 crore as compared to
| 98.2 crore in Q3FY10. The company generated | 3.4 crore from the
bowling alley segment compared to | 3.2 crore in the same period
last year. PVR Pictures production “Khelein Hum Jee Jaan Sey” that
was released during the quarter fared poorly at the box office due to
which the company reported a loss of | 17.8 in the segment.
Valuation
The exhibition and bowling alley segment continued to perform on
expected lines. With seemingly good movies slated to release in the next
few months, we remain upbeat on the company’s performance. At the
CMP of | 127, the stock is trading at 24.5x FY11E consolidated EPS of |
5.2 and 16.1x FY12E EPS of | 7.9. We value the stock at 18x FY12E and
arrive at a target price of | 142, implying an upside of 12%. We reiterate
our rating on the stock as BUY. PVR is our top pick in the multiplex sector.
Result analysis
ƒ Occupancy declines while ATP is on the rise
Occupancy for the quarter declined to 27.7% as compared to 30.0%
in Q2FY11 and 36.8% in Q3FY10 as major big budget movies failed
to make an impact as compared to 3 idiots and Ajab Prem Ki Ghajab
Kahani in Q3FY10.
ƒ Other revenue segments
PVR Blu-O has been performing in line with the company’s
expectations. This segment reported revenues of | 3.4 crore as
compared to | 3.2 crore in Q3FY10. The management has indicated
that it will set up 80 new lanes by the end of FY12E.
PVR Pictures is in the business of film distribution and production.
The company released the movie Khelein Hum Jee Jaan Sey during
Q3FY11, which failed at the box office. Consequently, the company
reported an EBIT loss of | 17.8 crore in the segment. The company
has two movies “3 The Bhai” (Comedy) and “Shanghai” (Action)
slated for release in FY12. However, the management has guided for
restricting investment in the movie production business and focusing
on the distribution business
Outlook & Valuation
PVR has not had a good run with its home productions in the recent past.
It has reported a net loss of | 20.3 crore in the movie segment in 9MFY11.
The management has indicated at reducing its exposure to the movie
production and focusing more on the distribution business only. The
exhibition and bowling alley segment continued to perform on expected
lines. With seemingly good movies slated to release in the next few
months, we remain upbeat on the company’s performance.
At the CMP of | 127, the stock is trading at 24.5x FY11E consolidated EPS
of | 5.2 and 16.1x FY12E EPS of | 7.9. We have valued the stock at 18x
FY12E and arrived at a target price of | 142, implying an upside of 12%.
We reiterate our rating on the stock as BUY. PVR is our top pick in the
multiplex sector.
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