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Motilal Oswal
PVR (Buy)
CMP: ₹1,176.25
Target: ₹1,429
The Hindi film Dangal reported stellar net box office collection (NBO) of about ₹240 crore until December end in India, which is expected to aid PVR (about 20 per cent market share, according to management) in the current quarter. Stellar numbers by Dangal show that demonetisation cannot have much impact on the multiplex business if content is good.
We expect the impact of demonetisation to be lower than our previous estimates. We thus increase our earnings estimates by 22 per cent for FY17 (was mainly cut because of impact on operating leverage in view of demonetisation) while broadly maintaining FY18 estimates. We introduce FY19 estimates, and expect 21 per cent revenue CAGR and 29 per cent PAT CAGR over FY16-19E, driven by EBITDA margin. We expect overall EBITDA margin to improve from 17.7 per cent in FY16 to 19 per cent in FY19, mainly driven by synergies from DT Cinemas integration.
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