Stock To Buy: With Strong Q1FY23 Results, Brokerage Sees Potential Gains Of 19%, Suggests Buy

ICICI Securities, a well-known brokerage firm has recently published a report on PVT Ltd with a 'buy' rating for a target price of Rs 2,300 apiece. PVR Ltd. is the market leader in terms of multiplex screen count in India. Currently, it operates 858 screens in 174 cinemas in 75 cities in India and Sri Lanka with an aggregate seating capacity of ~1.79 lakhs seats as on Q1FY23. Considering the estimated target price by the brokerage, if investors buy the stocks of the company at the current market price they can expect potential returns of 19% in 12 months.

Stock Outlook & Returns

The Current Market Price (CMP) of the PVR stock is Rs 1,946.60 apiece, it was opened at Rs 1,913 apiece, while the previous close was Rs 1,913.45 apiece. Trading 1.73% above the previous close. The stock reported a 52-week low at 1,224.05 apiece on 20 December 2021, and the 52-week high at 2,003.80 apiece on 28 March 2022, respectively. 

Last week its share declined nearly 2.5%, while in the last 1 month it declined roughly 0.04%, respectively. Over the past 1 year, its share price has gained 22.96%. However, its share in the past 3 years, shares gained a marginal 0.43%. In the last 5 years, it gave a positive return on investment of around 20.33%.

PVR is a small cap entertainment industry company with a market capitalization of Rs 11,968 crore. Stock's ROE is negative at 35.63%. The TTM EPS is also negative at Rs 35.27.

With leadership in the high realisation key markets of Maharashtra/NCR, it enjoys superior ATP, SPH and advertisement than peers.

Q1FY23 Results: Strong Performance

Reported revenue was at Rs 981.4 crore, (up 83% QoQ) and 11% higher than pre-covid levels in Q1FY20. PVR reported box office revenue of Rs 530.2 crore (up 80% QoQ) and ad revenues of Rs 62.7 crore. The company reported Rs 323.8 crore of F&B revenues, up 90% QoQ, with SPH at Rs 134 was up 10% QoQ. The footfalls were up ~75% QoQ at 25 million and ATP at Rs 250 was up ~3% QoQ owing to slate mix. 

EBITDA (ex- Ind AS116) was at Rs 189 crore with margins of 19.3% (better than pre covid levels of 18%) given the strong box office performance. On reported basis, EBITDA was at Rs 341.6 crore (margin of 34.8%) .

The reported PAT was at Rs 53.4 crore led by strong operating performance. The company reported net PAT (ex- Ind AS116) at Rs 68.3 crore.

 

ICICI Securities Suggests buy for a target price of Rs 2,300 apiece

PVR share price has grown by ~45% over the past five years (from ~Rs 1316 in July 2017 to ~Rs 1914 levels in July 2022). We maintain BUY rating on the company. We value PVR at Rs 2300 i.e. 15x FY24E EV/EBITDA.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.