Prabhudas Lilladher's research report on PVR
PVR’s operational performance was broadly in-line with our estimates. Emergence of 2nd wave has delayed the recovery process (all screens are currently shut) and footfall stabilization is expected in 2HFY22 given rising instances of localized lockdowns prompting us to cut our FY22E EBITDA estimates by ~43% odd. Nonetheless, we keep our FY23E estimates broadly intact and remain constructive over the long term as content pipeline is strong which is expected to result in bunching up of releases post reopening.
Outlook
We maintain BUY with a revised TP of Rs1,429 (11x FY23EBITDA; no change in target multiple) as 1) the ongoing vaccination drive is expected to eliminate fear psychosis thereby improving consumer sentiments 2) encouraging ATP (higher/similar to pre-COVID levels for fresh content)/SPH (flat on YoY basis) trends indicate there is no change in behavioral psyche of patrons and 3) wide spread closure of single screens amid liquidity constraints is expected to reduce competitive risks post-pandemic. Stringent cost control (fixed cost reduction of 63% YoY in FY21) and sufficient liquidity on the BS (cash of Rs7.3bn as of FY21) gives us additional comfort till normalcy sets in.
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