Buy PVR, target price Rs 2265: ICICI Direct

ICICI Direct has buy call on PVR with a target price of Rs 2265. The current market price of PVR is Rs 1854.15.
Time period given by analyst is one year when PVR Ltd. price can reach defined target.

PVR Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 11322.01 Crore) operating in Media & Entertainment sector.


PVR Ltd. key Products/Revenue Segments include Income From Films, Beverages & Food, Fees & Other Charges, Income From Advertisement, Other Operating Revenue and Income from Films Production & Distribution for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 709.71 Crore, up 157.88 % from last quarter Total Income of Rs 275.21 Crore and up 121.69 % from last year same quarter Total Income of Rs 320.13 Crore. Company reported net profit after tax of Rs -10.20 Crore in latest quarter.

Investment Rationale
The brokerage notes that along with bigger entity with synergy benefits, MergedCo will benefit from faster growth trajectory (the management is looking to add 200+ screens every year and ~2000 screens over the next seven years). In terms of risks, uncertainty on CCI steps ahead will remain. However, consummation of merger will result in entity with higher revenues and margins potential. It maintains BUY on both PVR and Inox Leisure assigning a EV/EBITDA multiple of 14x on the MergedCo FY24 EBITDA (vs. 13x for PVR and 11x on Inox, earlier). It assigns a target price of Rs 2265/share for the MergedCo and PVR. The subsequent target price for Inox is Rs 680/share as per the swap ratio.


Promoter/FII Holdings
Promoters held 17.02 per cent stake in the company as of 31-Dec-2021, while FIIs owned 40.08 per cent, DIIs 20.11 per cent.