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Cinemax Limited
W o r l d C u p l e a d s t o b el o w e s t i m a t e s h o w …
Cinemax’ Q4FY11 topline was slightly better than our expectations. The
company reported net revenues of | 36.4 crore against our expectation of
| 34.4 crore, de-growing 36.5% QoQ and 18.7% YoY. The de-growth can
be primarily attributed to a huge dip in the occupancy levels, which stood
at a mere 14% as against 26% in Q3FY11 as well as Q4FY10. However, on
the EBITDA and PAT front, the numbers were below our expectations.
Cinemax posted EBITDA of | 2.5 crore (I-direct estimate: | 4.7 crore) with
a margin of 6.8% as against 19.8% in Q3FY11 and 9.2% in Q4FY10. The
company reported a loss of | 2.2 crore against our expectation of a loss
of | 1.0 crore.
ƒ Highlights of the quarter
This was one of the weakest quarters for the exhibition industry due
to lack of quality content owing to the World Cup. ATP also took a
hit and fell to | 127 from | 134 in Q3FY11 while it decreased
marginally by | 1 YoY. Occupancy levels fell drastically to 14% from
25% in Q4FY10 and 26% in Q3FY11. Footfalls also fell to 2.2 million
from 3.5 million in Q3FY11 and 4.0 million in Q4FY10.
V a l u a t i o n
Q4FY11 was marked by a lack of quality content due to the ICC World
Cup 2011. Also, Q1FY12 is expected to be relatively subdued due to 2/3
of the quarter being occupied by the recently concluded IPL season 4.
However, we expect a good movie pipeline in the next couple of quarters.
Also, the company plans to roll out 10 more properties in FY12 out of
which it has already commissioned one property in Delhi. We expect
20.6% and 63.6% CAGR in revenue and PAT, respectively, over FY11-
13E. At the CMP of | 37, the stock is trading at 10.8x FY12E EPS of | 3.4
and 7.0x FY13E EPS of | 5.2. We have valued the stock at 8.0x (20%
discount to PVR) FY13E and arrived at a target price of | 42, implying an
upside of 14%. We have upgraded the stock from HOLD to BUY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cinemax Limited
W o r l d C u p l e a d s t o b el o w e s t i m a t e s h o w …
Cinemax’ Q4FY11 topline was slightly better than our expectations. The
company reported net revenues of | 36.4 crore against our expectation of
| 34.4 crore, de-growing 36.5% QoQ and 18.7% YoY. The de-growth can
be primarily attributed to a huge dip in the occupancy levels, which stood
at a mere 14% as against 26% in Q3FY11 as well as Q4FY10. However, on
the EBITDA and PAT front, the numbers were below our expectations.
Cinemax posted EBITDA of | 2.5 crore (I-direct estimate: | 4.7 crore) with
a margin of 6.8% as against 19.8% in Q3FY11 and 9.2% in Q4FY10. The
company reported a loss of | 2.2 crore against our expectation of a loss
of | 1.0 crore.
ƒ Highlights of the quarter
This was one of the weakest quarters for the exhibition industry due
to lack of quality content owing to the World Cup. ATP also took a
hit and fell to | 127 from | 134 in Q3FY11 while it decreased
marginally by | 1 YoY. Occupancy levels fell drastically to 14% from
25% in Q4FY10 and 26% in Q3FY11. Footfalls also fell to 2.2 million
from 3.5 million in Q3FY11 and 4.0 million in Q4FY10.
V a l u a t i o n
Q4FY11 was marked by a lack of quality content due to the ICC World
Cup 2011. Also, Q1FY12 is expected to be relatively subdued due to 2/3
of the quarter being occupied by the recently concluded IPL season 4.
However, we expect a good movie pipeline in the next couple of quarters.
Also, the company plans to roll out 10 more properties in FY12 out of
which it has already commissioned one property in Delhi. We expect
20.6% and 63.6% CAGR in revenue and PAT, respectively, over FY11-
13E. At the CMP of | 37, the stock is trading at 10.8x FY12E EPS of | 3.4
and 7.0x FY13E EPS of | 5.2. We have valued the stock at 8.0x (20%
discount to PVR) FY13E and arrived at a target price of | 42, implying an
upside of 14%. We have upgraded the stock from HOLD to BUY.
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