Buy PVR, target price Rs 1460: Motilal Oswal

Motilal Oswal has given buy rating to PVR with a target price of Rs 1460. The share price moved down by 0.32 per cent from its previous close of Rs 1265. The stock’s last traded price is Rs 1260.95.

PVR Ltd., incorporated in the year 1995, is a Mid Cap company (having a market cap of Rs 6978.01 Crore) operating in Media & Entertainment sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 12.70 Crore, down 98.03 % from last quarter Sales of Rs 645.13 Crore and down -98.56 % from last year same quarter Sales of Rs 880.39 Crore. The Company reported net profit after tax of Rs -225.58 Crore in latest quarter.

Investment Rationale
The recent shift in movies to OTT platforms and increased viewership raises concerns regarding increased competition from the OTT medium. However, once the multiplexes resume operations, a fixed exclusive window of movie viewing in cinemas and healthy flow of movie content, coupled with PVR’s scale and execution, should bode well for the company. Also, sharp cost reduction measures could aid the business in the long term. The brokerage expects a revenue/EBITDA CAGR of 5%/3% for PVR over FY21–22E and value the company at 14x FY22E EBITDA to arrive at target price of INR1,460.

Promoter/FII Holdings
Promoters held 18.6 per cent stake in the company as of June 30, 2020, while FIIs held 37 per cent, DIIs 29.8 per cent and public and others 14.7 per cent.