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In a bumpy session on Monday, Indian equity indexes Sensex and Nifty50 gave up earlier gains after a bullish start. The market was dragged lower by gains across most sectors, led by automobile, metal, IT, pharmaceutical, and consumer durables stocks. Gains in a few financial companies, particularly private-sector lenders, aided the recovery. The shares of Just dial, PVR, and Inox Leisure got a buy call from ICICl Securities, a brokerage firm.
Just Dial Ltd - Investing for next leg of growth
Advertisers pay Just Dial (JDL) for various subscription and fee-based packages, which create revenue for the company.
The brokerage is positive on Just Dial's stock and has set a target price of Rs 960, with an upside potential of 17%, as opposed to the current market price of Rs 820.
Q2FY22 Results of Just Dial
In Q2FY22, JDL reported disappointing results.
Due to low collections, revenues fell 5.7 percent quarter over quarter. Adjusted EBITDA margins fell 700 basis points to 13.3 percent. Just Dial achieved a profit of 38 crore in QoQ, aided by greater other revenue.
Target and Valuation
"JDL's share price has grown by ~1.8x over the past five years (from ~|Rs 450 in October 2016 to ~Rs 820 levels in October 2021). We continue to remain positive and retain our BUY rating on the stock Target Price and Valuation: We value JDL at Rs 960 i.e. 24x P/E on FY23E EPS," the brokerage has said.
Key triggers for future price-performance:
JDL will benefit greatly from the move in advertising to the digital media and the underserved MSME (B2B) market. Paid customers account for only 1.3 percent of total MSME subscribers. JDL's B2B and B2C platforms are well-positioned to capitalize on this demand, with revenue CAGRs of 24% and 12%, respectively, through FY21-23.
Inox Leisure- Footfalls poised for strong recovery
In terms of multiplex screen count, Inox Leisure is India's second-largest player.
The brokerage is positive on Inox Leisure's stock and has set a target price of Rs 495, with an upside potential of 18%, as opposed to the current market price of Rs 418.
Q2FY22 Results
The total income reported was Rs 47.4 crore (vs. negligible revenues in Q2FY21). The box office took in Rs 27 crore, while food and beverage took in Rs 15 crore.
The EBITDA loss (without the impact of Ind-AS 116) was Rs 64.6 crore. EBITDA loss was Rs38.6 crore on a reported basis.
Target Price and Valuation
"Inox' share price has grown by ~66% over the past five years (from ~| 251 in October 2016 to ~| 418 levels in October 2021). We maintain BUY rating on the company. Target Price and Valuation: We value Inox at Rs 495 i.e. 13.5x FY23E EV/EBITDA," the brokerage has said.
Key triggers for future price performance
Reopening of theatres to boost traffic and income with the release of big-budget Hindi/Hollywood films on the horizon. Consolidation (10-15 percent of single screens may be permanently closed), resulting in increasing multiplex market share. Benefits of long-term cost savings (ex-rental) as a result of the rationalisation measure.
PVR
In terms of multiplex screen count in India, PVR Ltd is the market leader.
The brokerage is positive on PVR's stock and has set a target price of Rs 1627, with an upside potential of 17%, as opposed to the current market price of Rs 1627.
Q2FY22 Result
The reported revenue was Rs 120.3 crore.
PVR reported Rs 53.1 crore in box office revenue and Rs 7.7 crore in ad revenue. The company recorded F&B revenues of Rs 44.5 crore and movie distribution revenues of Rs 5.1 crore.
EBITDA loss (excluding the impact of Ind AS116) was Rs 115.4 crore, compared to Rs 121.5 crore in Q1. EBITDA loss was Rs 68.1 crore on a reported basis.
Target Price and Valuation
"PVR's share price has grown by ~35% over the past five years (from ~| 1204 in October 2016 to ~| 1627 levels in October 2021). We maintain a BUY rating on the company. Target Price and Valuation: We value PVR at Rs 1900 i.e. 15x FY23E EV/EBITDA," the brokerage has said.
Key triggers for future price-performance:
With the debut of big-budget Hindi/Hollywood films on the horizon, theatres will reopen to help boost footfall and income. Given the rationalisation steps, the corporation is anticipated to save 10% in long-term costs (excluding rental). Consolidation (10-15 percent of single screens may be permanently closed), resulting in increasing multiplex market share.
Disclaimer
The above stocks are picked from the brokerage report of ICICI Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
