04th June 2020

EVENT UPDATE

Retail Equity Research (South India Focus)

BUY
PVR Ltd
Media 12M Investment Period Rating as per Mid Cap

BSE CODE : 532689 NSE CODE: PVR CMP Rs. 1004 TARGET Rs. 1289 RETURN 28%
(Closing: 03-06-20)
BLOOMBERG CODE: PVRL:IN SENSEX : 34,110

KEY CHANGES: TARGET RATING EARNINGS

Strong fundamentals to withstand uncertainties Company Data
PVR Ltd owns and operates multiplexes across 21 States and UT’s with a Market Cap (Rs cr) 5,376
total of 825 screens (including 9 in Colombo). Major income segments for Outstanding Shares (cr) 5.1
them are Box office, Food & Beverage (F&B) and Advertisement (Ad).
Free Float 81.5%
 Estimates are made with a view that the theatres will be opened by
Dividend Yield 0.6%
mid-Q2 and start normalcy from FY22.
52 week high (Rs) 2,125
 Huge backlog of film content and strong brand name will be the growth
catalyst once normalcy is obtained. 52 week low (Rs) 718
 OTT platforms are not expected to be an alternative for movie releases 6m average volume (cr) 1.323
with its current subscription model. However, strategies adopted by Beta 1.0
OTT platforms to capture the market need to be carefully watched. Face value (Rs) 10
 Adoption of several measures to bring down fixed cost will help the
Shareholding (%) Q2FY20 Q3FY20 Q4FY20
company to combat Covid-19 crisis.
Promoters 19.6 18.4 18.5
 We expect slower recovery to normalcy as multiplexes are the last to
be opened and will experience short term subdued demand. Therefore FII’s/Others 58 57.5 53.1
we reduce our estimates for FY21 and FY22 and value the stock at 2.1x MFs/Institutions 11.1 15.5 20
FY22 EV/Sales and maintain BUY rating with target of Rs.1289. Public 11.3 8.6 8.4
Total 100 100 100
Expectation of a U shaped recovery
Promoter Pledge 0 0 0
The multiplex segment has been hard hit by Covid-19 outbreak. We expect a
longer period for returning to normalcy as multiplexes are the first to be closed Price Performance 3 month 6 month 1 year
and last to be opened and people tend to avoid gatherings even once restrictions Absolute Return -37.91% -42.27% -43.01%
are lifted. We expect multiplex to become conditionally functional from mid-Q2
Absolute Sensex -10.03% -16.41% -15.66%
and also see a subdued occupancy until fourth quarter. Huge backlog of film
content will be a catalyst for its strong revival once normalcy is achieved. Even Relative Return* -27.88% -25.86% -27.35%
though there has been few movie releases through OTT platforms (like Amazon *over or under performance to benchmark index
Prime, Netflix) we expect the business of PVR to be least affected considering the
non viability of current OTT subscription model and lack of experience creation
for viewers. However, a shift to Pay-per-view model or any other reforms being
introduced by the OTT platforms has to be closely watched. With the proceeds
from recent QIP of Rs.500Cr, we expect PVR to increase its market share in the
coming years as we see the possibility of single screens deciding to shut down
due to cash flow crisis and PVR planning for aggressive expansion. PVR is
planning for a new set of fund raising and decision is to be finalised in the
upcoming board meeting.
Estimate Revision Standalone (Rs Cr) FY20E FY21E FY22E
PVR is expected to generate zero revenue from its core business during the Sales 3,473 1,466 3,685
lockdown period as all the three major segments (Box office, Food and Beverage,
Advertisement) are completely shut. Measures such as invoking force majeure Growth (%) 12.5 -57.8 151.4
clause leading to suspension of rent and other maintenance expenses, reduction EBITDA 1,139 371 1,236
of employee expenses by 30-35% and reduced operating expenses will bring EBITDA Margin(%) 32.8 25.3 33.5
down the fixed cost to ~50Cr/ month (from ~140Cr/month in Q3FY20) during
PAT Adj. 112 -372 175
lockdown. We therefore revise our estimates to adjust the impact of ongoing
lockdown by reducing FY21 and FY22 revenue estimate by 59%/14%. Growth (%) -39.2 -433 -
Adj.EPS 24 -80 37
Outlook & Valuation
We expect subdued occupancy during FY21 even once the multiplexes are Growth (%) -39.2 -433 -
allowed to open. However, a strong come back is expected in FY22 due to huge P/E 46.1 -13.8 29.4
content backlog and strong market share. We therefore value the stock at 2.1x P/B 2.8 3.6 3.2
FY22 EV/Sales and maintain our BUY rating with a target price of Rs. 1289.
EV/EBITDA 4.9 16 4.7
Old estimates New estimates Change %
ROE (%) 7.4 -22.9 11.5
Year / Rs cr FY20E FY21E F22E FY20E FY21E FY22E FY20E FY21E FY22E
D/E 0.8 1.1 0.9
Revenue 3,473 3,552 4,264 3,473 1,466 3,685 0% -59% -14%

EBITDA 1,139 1,163 1,345 1,139 371 1,236 0% -68% -8%

(740 203
Margins (%) 32.8 32.7 31.5 32.8 25.3 33.5 -
bps) bps
Adj. PAT 112 115 220 112 -372 175 0% -424% - Cyril Charly
EPS (Rs) 24 23.8 45.5 24 -80 37 - -405% - Research Analyst

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 27th December 2018
Consolidated Financials

PROFIT & LOSS BALANCE SHEET

Y.E March (Rs Cr) FY18A FY19A FY20E FY21E FY22E Y.E March (Rs Cr) FY18A FY19A FY20E FY21E FY22E
Sales 2,334 3,086 3,473 1,466 3,685 Cash 33 53 540 281 277
% change 10.1 32.2 12.5 -57.8 151.4 Account Receivable 156 184 209 141 227
EBITDA 402 586 1,139 371 1,236 Inventories 20 30 34 12 38
% change 28.1 45.9 94.3 -67.4 233.1 Other Cur. Assets 304 396 430 288 441
Depreciation 154 191 523 441 547 Investments 20 11 27 22 22
EBIT 248 395 616 -69 689 Gross Fixed Assets 1467 2017 2267 2367 2647
Interest 84 128 483 347 460 Net Fixed Assets 1127 1486 1513 1404 1434
Other Income 31 33 42 44 41 CWIP 102 221 232 239 246
PBT 195 300 174 -372 269 Intangible Assets 463 1311 1071 916 721
% change 27.7 53.8 -41.9 -313.3 -172.3 Def. Tax (Net) 15 -85 -82 -80 -77
Tax 70 110 63 0 94 Other Assets 110 221 3915 3721 3469
Tax Rate (%) 36% 37% 36% 0% 35% Total Assets 2348 3828 7888 6945 6798
Reported PAT 125 184 112 -372 175 Current Liabilities 598 965 892 700 990
Adj.* -1 0 0 0 0 Provisions 13 21 17 7 18
Adj. PAT 125 184 112 -372 175 Debt Funds 661 1331 1356 1395 1254
% change 25.4 46.6 -39.2 -433.3 -147.0 Other Liabilities 1 257 3768 3359 2889
5 5 Equity Capital 47 47 51 51 51
No. of shares (cr) 5 5 5
Reserves & Surplus 1029 1162 1759 1386 1550
Adj EPS (Rs) 27 39 24 -80 37
Shareholder’s Fund 1075 1208 1810 1438 1601
% change 25 47 -39 -433 -147
Total Liabilities 2348 3782 7843 6899 6752
DPS (Rs) 3 3 2 0 2
BVPS 230 259 353 280 312

CASH FLOW RATIOS

Y.E March (Rs Cr) FY18A FY19A FY20E FY21E FY22E Y.E March FY18A FY19A FY20E FY21E FY22E

Net inc. + Depn. 348 381 334 -164 426 Profitab & Return
Non-cash adj. 40 195 739 532 713 EBITDA margin (%) 17.2 19.0 32.8 25.3 33.5
Changes in W.C 58 244 -140 32 35 EBIT margin (%) 10.6 12.8 17.7 -4.7 18.7
C.F. Operation 446 819 933 401 1174 Net profit mgn.(%) 5.4 6.0 3.2 -25.4 4.7
Capital exp. -340 -1517 -321 -185 -388 ROE (%) 12.3 16.1 7.4 -22.9 11.5
Change in inv. -67 -96 -3710 199 252 ROCE (%) 10.4 11.8 14.2 -0.8 15.9
Other invest.CF 2 33 42 44 41 W.C & Liquidity
C.F - Investment -405 -1580 -478 -352 -565 Receivables (days) 20.1 20.1 20.7 43.6 18.2
Issue of equity 0 0 502 0 0 Inventory (days) 3.0 3.0 3.4 5.7 2.4
Issue/repay debt 25 670 25 39 -141 Payables (days) 84.2 92.4 97.6 198.2 83.7
Dividends paid -11 -11 -12 0 -12 Current ratio (x) 0.8 0.7 1.3 1.0 1.0
Other finance.CF -80 121 -483 -346 -460 Quick ratio (x) 0.3 0.2 0.8 0.6 0.5
C.F - Finance -66 780 32 -307 -613 Turnover &Leverage
Chg. in cash -25 20 487 -258 -4 Gross asset T.O (x) 1.7 1.8 1.6 0.6 1.5
Closing cash 27 53 540 281 277 Total asset T.O (x) 1.0 1.0 0.6 0.2 0.5
Int. covge. ratio (x) 3.0 3.1 1.3 -0.2 1.5
Adj. debt/equity (x) 0.7 1.2 0.8 1.1 0.9
Valuation
EV/Sales (x) 2.3 2.0 1.6 4.1 1.6
EV/EBITDA (x) 13.5 10.4 4.9 16.0 4.7
P/E (x) 37.5 25.6 46.1 -13.8 29.4
P/BV (x) 4.4 3.9 2.8 3.6 3.2

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 27th December 2018

Recommendation Summary (last 3 years) Dates Rating Target

7th Feb 2017
12th June 2017
1tst Aug 2017
3rd Nov 2017
21st Feb 2018 Hold
8th May 2018 Accumulate
30th July 2018 Buy
30th October 2018 Hold
29th January 2019 Accumulate 1,742
20th May 2019 Buy 2,100
20th Aug 2019 Accumulate 1,604
22nd October 2019 Buy 2,115
17th March 2020 Buy 1,558
4th June 2020 Buy 1,289

Source: Bloomberg, Geojit Research.

Investment Criteria
Ratings Large caps Midcaps Small caps
Buy Upside is above 10% Upside is above 15% Upside is above 20%
Accumulate - Upside is between 10% - 15% Upside is between 10% - 20%
Hold Upside is between 0% - 10% Upside is between 0% - 10% Upside is between 0% - 10%
Reduce/sell Downside is more than 0% Downside is more than 0% Downside is more than 0%
Not rated -

Definition:

Buy: Acquire at Current Market Price (CMP), with the target mentioned in the research note.
Accumulate: Partial buying or to accumulate as CMP dips in the future.
Hold: Hold the stock with the expected target m entioned in the note.
Reduce: Reduce your exposure to the stock due to limited upside.
Sell: Exit from the stock.
Not rated : The analyst has no investment opinion on the stock.

To satisfy regulatory requirements, we attribute ‘Accumulate’ as Buy and ‘Reduce’ as Sell.

The recommendations are based on 12 month horizon, unless otherwise specified. The investment ratings are on absolute positiv e/negative return basis.
It is possible that due to volatile price fluctuation in the near to medium term, there could be a temporary mismatch to rating. For reasons of valuations/
return/lack of clarity/event we may revisit rating at appropriate time. Please note that the stock always carries the risk of being upgraded to BUY or
downgraded to a HOLD, REDUCE or SELL.

CERTIFICATION
I, Cyril Charly, author of this Report, hereby certify that all the views expressed in this research report reflect our personal views about any or all of the
subject issuer or securities. This report has been prepared by the Research Team of Geojit Financial Services Limited, herein after referred to as Geojit.
COMPANY OVERVIEW
Geojit Financial Services Limited (hereinafter Geojit), a publically listed company, is engaged in services of retail broking, depository services, portfolio
management and marketing investment products including mutual funds, insurance and properties. Geojit is a SEBI registered Research Entity and as such
prepares and shares research data and reports periodically with clients, investors, stake holders and general public in compliance with Securities and
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directives, instructions or guidelines issued by the Regulators from time to time.
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This document is not for public distribution and has been furnished to you solely for your information and must not be reprod uced or redistributed to any
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The research reports do not constitute an offer or solicitation for the purchase or sale of any financial instruments, induce ments, promise, guarantee,
warranty, or as an official confirmation of any transaction or contractual obligations of any kind. This report is provided f or assistance only and is not
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the research report for any untrue statements of material facts or any false or misleading information. While we endeavor to update on a reasonable basis
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RISK DISCLOSURE
Geojit and/or its Affiliates and its officers, directors and employees including the analyst/authors shall not be in any way be responsible for any loss or
damage that may arise to any person from any inadvertent error in the information contained in this report. Investors may los e his/her entire investment
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investments referred to in this report may fluctuate and investors may realize losses that may exceed their original capital.

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FUNDAMENTAL DISCLAIMER 27th December 2018

We have prepared this report based on information believed to be reliable. The recommendations herein are based on 12 month h orizon, unless otherwise
specified. The investment ratings are on absolute positive/negative return basis. It is possible that due to volatile price f luctuation in the near to medium
term, there could be a temporary mismatch to rating. For reasons of valuations/return/lack of clarity/event we may revisit ra ting at appropriate time. The
stocks always carry the risk of being upgraded to buy or downgraded to a hold, reduce or sell. The opinions expressed are sub ject to change but we have no
obligation to tell our clients when our opinions or recommendations change. This report is non -inclusive and does not consider all the information that the
recipients may consider material to investments. This report is issued by Geojit without any liability/undertaking/commitment on the part of itself or anyof
its entities. We may have issued or may issue on the companies covered herein, reports, recommendations or information which is contrary to those
contained in this report.
The projections and forecasts described in this report should be evaluated keeping in mind the fact that these are based on estimates and assumptions and
will vary from actual results over a period of time. The actual performance of the companies represented in the report may va ry from those projected. These
are not scientifically proven to guarantee certain intended results and hence, are not published as a warranty and do not car ry any evidentiary value
whatsoever. These are not to be relied on in or as contractual, legal or tax advice. Prospective investors and others are cau tioned that any forward-looking
statements are not predictions and may be subject to change without notice.
JURISDICTION
The securities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. The coun tries in which the companies
mentioned in this report are organized may have restrictions on investments, voting rights or dealings in securities by nationals of other countries.
Distributing/taking/sending/dispatching/transmitting this document in certain foreign jurisdictions may be restricted by law, and persons into whose
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effect on the value or price of or income derived from the investment. Investors in securities such as ADRs, the value of whi ch are influenced by foreign
currencies effectively assume currency risk.

REGULATORY DISCLOSURES:
Geojit’s Associates consists of privately held companies such as Geojit Technologies Private Limited (GTPL- Software Solutions provider), Geojit Credits
Private Limited (GCPL- NBFC Services provider), Geojit Investment Services Limited (GISL- Corporate Agent for Insurance products), Geojit Financial
Management Services Private Limited (GFMSL) &Geojit Financial Distribution Private Limited (GFDPL), (Distributors of Insurance and MF Units).In the
context of the SEBI Regulations on Research Analysts (2014), Geojit affirms that we are a SEBI registered Research Entity and in the course of our
business as a stock market intermediary, we issue research reports /research analysis etc that are prepared by our Research Analysts. We also affirm and
undertake that no disciplinary action has been taken against us or our Analysts in connection with our business activities.
In compliance with the above mentioned SEBI Regulations, the following additional disclosures are also provided which may be considered by the reader
before making an investment decision:

1. Disclosures regarding Ownership*:

Geojit confirms that:
It/its associates have no financial interest or any other material conflict in relation to the subject company (ies) covered herein.

It/its associates have no actual beneficial ownership greater than 1% in relation to the subject company (ies) covered herein .
Further, the Analyst confirms that:
he, his associates and his relatives does not holds shares / has no other financial interest in the subject company (ie s) covered herein
he, his associates and his relatives have no actual/beneficial ownership greater than 1% in the subject company covered herein.
2. Disclosures regarding Compensation:
During the past 12 months, Geojit or its Associates:
(a) Have not received any compensation from the subject company; (b) Have not managed or co-managed public offering of securities for the subject
company (c) Have not received any compensation for investment banking or merchant banking or brokerage services from the su bject company. (d) Have
not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject
company (e) Have not received any compensation or other benefits from the subject company or third party in connection with t he research report (f) The
subject company is / was not a client during twelve months preceding the date of distribution of the research report.
3. Disclosure by Geojit regarding the compensation paid to its Research Analyst:
Geojit hereby confirms that no part of the compensation paid to the persons employed by it as Research Analysts is based on a ny specific brokerage
services or transactions pertaining to trading in securities of companies contained in the Research Reports.
4. Disclosure regarding the Research Analyst’s connection with the subject company:
It is affirmed that the I, Cyril Charly, Research Analyst(s) of Geojit have not served as an officer, director or employee of the subject company
5. Disclosure regarding Market Making activity:
Neither Geojit/its Analysts have engaged in market making activities for the subject company. Please ensure that you have rea d the “Risk Disclosure
Documents for Capital Market and Derivatives Segments” as prescribed by the Securities and Exchange Board of India before investing.

Digitally signed by CYRIL CHARLY

DN: c=IN, o=GEOJIT FINANCIAL SERVICES LIMITED, ou=FUNDAMENTAL

CYRIL CHARLY
RESEARCH,
2.5.4.20=f6e39b1347bd6a3d17384c73f69689579cd166577de2ad80b81fde7b
29ca7486, postalCode=682024, st=KERALA,
serialNumber=3bc013f21f1e22e847d67e2ea38f360042f168799ac754ef69482
46c706f69a8, cn=CYRIL CHARLY
Date: 2020.06.05 14:18:36 +05'30'

Geojit Financial Services Ltd. (formerly known as Geojit BNP Paribas Financial Services Ltd.), Registered Office: 34/659-P, Civil Line Road, Padivattom, Kochi-
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