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IDBI Capital
PVR (Accumulate)
Target: ₹1,428
CMP: ₹1353
Q4-FY21 was another quarter where PVR Limited demonstrated strong cost management amid partial reopening of Cinemas and weak content. It was able to limit the EBITDA (Ex-Ind AS) loss at ₹127.60 crore, similar to Q3-FY21 levels and in-line with our forecast.
Amid the second wave of infections, Cinemas have remained closed for most of Q1-FY22. While we expect reopening of Cinemas in Q2, we expect meaningful content to be released only in Q3. PVR currently has liquidity of about ₹750 crore, enabling resolution to raise ₹500 crore via NCDs and can raise another ₹200 crore via the ECLGS scheme. Thus it is well capitalised to weather the headwinds in the near term.
Given that Cinemas have again been closed, PVR is in discussion with its developer partners for further relief on rent and CAM. While it is difficult to predict the re-opening of Cinemas in the near term, it is confident of a positive response from most of its developer partners.
We factor the shut-down phase in FY22 and normalisation only in FY23. We now forecast FY22 EBITDA of ₹74.6 crore vs. ₹633.50 crore and cut our FY23 EBITDA by 6 per cent to ₹738.50 crore. We now recommend Accumulate with a revised target price of ₹1,428 (vs. ₹1,570) based on EV/EBITDA of 13x FY23.
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