Firm Name PVR

Firm Name PVR

Firm Overview
Largest and the most premium film exhibition company in India, Currently operating with 748 screen across India
Inorganic through acquisition of Cinemax (2012) and DT Cinemas (2016) SPI Cinemas (2018)
CineAsia’s Asian Exhibitor of the Year 2017 award recipient
Ventured into Sri Lanka for cinema experience outside India and poised to go global , JV to be formed for middle east

Quality of business and management

Board consist of Industry veterans with experience of more than 20 years
Front runner in digitisation and implementation of technology
Complete control of business from movie viewing, foods and beverages and film distribution but largely dependent on succ
Occupancy rate of theater ar around 35% indicating having enough capacity to accommodate any surge in demand

Growth drivers
Poised with organic and inorganic growth with yearly addition of 90+ screen on target out which 55 have been achieved till
Still Screen penetration in India is fairly low especially in the Tier1& Tier 2 cities thereby providing adequate opportunity to
Addition of PVR Play house for children to enhance their viewing experience
Entered into online streaming space with Vkaoo but still the brand in its initial stage

Margin drivers
RBI disallowing internet fees to be collected while booking could be put a pressure on the margins of the company
The taxation rate on movie tickets have been reduced from 22-25% to less than 18% under than GST regime and for ticke
evenif the ticket prices would be lower the margins of the company could improve due to better occupancy rate of the thea

Moats and longevity

India's population of 1.2 billion and of which more than 50% is under the age of 25 could provide big boom to the entertain
Over 1000 films produced in India highest in the world hence the cinema chain are poised to benefit from the same
Highly penetrated with 40% of Hollywood collection in India and 25% of Box office Collection

Valuation view
A modest upside of 8% from the current levels of Rs 1700 to Rs 1850 in the near term but if the company could continue it
Being a potential noncyclic business and ever-growing India's population and need for more entertainment penetration

Key risks
F&B Business comprising of 27% of revenue could drastically be impacted if the supreme court upholds J&K high court ord
Torrent use which is illegal but due to high internet penetration could affect the topline of the company
Rise of sporting events and change in taste of people (IPL time is generally dully for cinemas)
Advent of online viewing services (Amazon and Netflix)

Sources:
Bloomberg
Company Website
Annual Report
Elara Cpaital Report

Notes
 Fill only in the yellow spaces. Do not update/ed
last updated: 3/14/2019 FY; All figures in crores
by: Rushabh Chheda Financials
748 screen across India Revenue
growth rate

to be formed for middle east Gross Income

margin %

Operating Income
margin %
Interest expense
on but largely dependent on success of film to earm its revenue back to back flops coulNet Income
date any surge in demand margin %

share o/s
Basic EPS
which 55 have been achieved till Q3
roviding adequate opportunity to expand in future Cash & Cash Equivalent
Short term debt+ CP of
Long term Debt
Total Equity
Inventory
Receivables
margins of the company Payables
er than GST regime and for tickets below Rs 100 is is further lower thereby
better occupancy rate of the theater Cash flow from ops
Cash from from inv
Cash flow from fin

Explain Assumptions:
provide big boom to the entertainment industry due to presence of large market Revenue growth
d to benefit from the same Gross Margin
Operating Margin
Net Income Margin
Shares outstanding

if the company could continue its growth trajectory it could be a good long term bet Inox Leisure Limited
ore entertainment penetration Cineplex
Cinemark Holding Inc
Shamroo Entertainment
Zee Entertainment Limited
Median

court upholds J&K high court order to allow outside eatery in cinema halls as it would MktC
he company 7642.69
e yellow spaces. Do not update/edit other formulae
Historicals
2014A 2015A 2016A 2017A 2018A 2019E
1358.83 1485.98 1897.09 2181.68 2365.45 2,909.50
1.0935731475 1.2766591744 1.1500139688 1.0842332514 23%

938.32 1036.42 1353.3 1576.42 1668.72 2,123.94

0.6905352399 0.6974656456 0.7133557185 0.7225715962 0.7054556216 0.73

131.82 90.7 226.34 237.49 279.49 378.24

0.0970099277 0.0610371607 0.119309047 0.1088564776 0.1181551079 0.13

56.05 12.76 118.73 95.79 124.7 165.8416995

0.0412487213 0.0085869258 0.0625853281 0.0439065307 0.052717242 0.057

4.110622 4.110622 4.6686938 4.6738588 4.6738588 4.6738588

13.635406029 3.1041530941 25.431095952 20.494842506 26.680309641 35.482821924

27.26 25.73 24.39 29.9 32.79

32.05 152.93 202.91 125.08 99.83
479.02 635.47 574.09 605.04 561.56
399.3 409.19 869.46 1005.51 1076.17
10.63 12.6 20.47 19.04 19.8
52.3 25.73 90.08 102.08 155.61
161.07 141.27 188.46 197.62 251.11

213.15 155.26 337.32 319.61 446.26

-106.52 -205.42 -525.15 -632.09 -405.39
-116.98 48.8 185.11 60.15 -65.95

Rationale
Resent Results and Inorganic growth
Rise in the advertisement expense and better occupance rate
Rise in the advertisement expense and better occupance rate
Rise in the advertisement expense and better occupance rate
stable

FY19E FY20E FY21E

24.66 29.94 24.27
19.65 19.27 16.83
16.92 16.66 15.95
13.92 12.29
nment Limited
18.285 17.965 16.83

EntV beta %D %P %G %F
8439 0.911 0.9984273605 20.25 0 38.94
 Projections
2020E 2021E 2022E 2023E
3,491.40 4,084.94 4,697.68 5,261.41
20% 17% 15% 12%

2,548.73 2,982.01 3,429.31 3,840.83

0.73 0.73 0.73 0.73

453.88 531.04 634.19 710.29

0.13 0.13 0.135 0.135

199.0100394 232.8417461 281.86106107 315.68438839

0.057 0.057 0.06 0.06

4.6738588 4.6738588 4.6738588 4.6738588

42.579386309 49.817881982 60.305857136 67.542559992

Rev CH Rec CF NI CH NI CF GM OM
14.8648530963 15.9633472634 22.1300989983 17.4599580447 70.5876764338 10.0873544164
NM ANR% BAF% ND/Eb Cov
4.1808949578 4.35 8% 0.229399329