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PVR: Super Hit Quarter!

ICICIdirect Research 22 Jul 2022 DISCLAIMER

What's Buzzing

PVR's strong performance was robust led by strong box office recovery

Context

PVR reported strong performance with box office revenue of Rs 530.2 crore (up 80% QoQ; 16% higher than precovid). The company reported Rs 323.8 crore of F&B revenues, up 90% QoQ, with SPH at Rs 134 was up 10% QoQ. The ad revenues of Rs 62.7 crore (68% of precovid). 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.

Our Perspective

The company has guided for 125 screens opening FY23, with capex of Rs ~400 crore, all funded through internal accruals. It also guided that ad revenues would get to pre-Covid run rate in Q3 led by festive recovery. On the SPH front, the company indicated that SPH to ATP ratio (currently at 54%) will continue to inch up, going ahead. It expects the ATP to remain firm. We continue to believe PVR is a proxy play on urban/semi urban discretionary spends. We believe that that with strong content pipeline recovery trend will continue ahead. Furthermore, merged entity (PVR Inox) will benefit from scale of expansion, faster growth trajectory and other revenues/cost synergy

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