Tuesday, June 16, 2020

PVR - Q4 FY20 Results

PVR - Q4 FY20 Results

PVR - Q4 FY20 Results
Total income from operations 645.1 Cr 
837.6 Cr (-22.96%)  YoY | 915.7 Cr (-29.52%) QoQ 
Year ending revenue: 3,414 Cr Vs. 3,085 Cr (10.61%)

Net Profit of (74.6) Cr 
46.7 Cr (-260.87%) YoY 36.2 Cr (-305.23%) QoQ 
Year ending Net profit: 26.8 Cr Vs. 189.4 Cr (-86.21%)

EPS (in Rs.) (15.25)
9.65 YoY | 7.19 QoQ 
Year ending EPS: 5.47 Vs. 39.52

View: Result is declined. YoY revenue declined and company also posted losses in this quarter.  Beginning March 11, 2020, Company started closing its screens in accordance with the order passed by various regulatory authorities and within a few days most of our cinemas across the country were shut down.

Business Updates & Highlights:

Q4FY20 EBITDA is around INR 189 Cr Vs. 169 Cr in Q4FY19 Vs. 303.2 Cr in Q3FY20 therefore up by 11.8% in YoY and declined by 37.6% in QoQ. EBITDA Margin was around 29% in Q4FY20. 

FY20 EBITDA was around INR 1,114 Cr Vs. 619 Cr in corresponding previous year up by 80% in YoY. EBITDA margin was 32%. 

The overall EBITDA margins of the company were 18% (after excluding IND-AS 116 impact). Further the PAT of the company, for Q4 and FY 20 was impacted by an amount of Rs. 32crs due to a one- time re-measurement of deferred tax assets of the company.

Key business updates

The company business has adversely impacted due to lockdown imposed in entire country not only for Q4FY20 quarter but next two quarter company business will face more pain since all movie, production house, cinema hall still not opened. So due to this company has made the following plans:

  1. Reducing in employee costs by reducing the compensation across all levels during the lockdown period and reduction in headcount as well
  2. Invoked force majeure closure as per their agreements with landlords seeking waiver of rentals and maintenance charges during lockdown period. 
  3. Also ongoing discussion with landlords for reducing the rentals post lockdown period.
  4. Reduction of all overhead expenditure during the period of lockdown.
FY20 company added 87 screens, highest ever screens opened in a financial year by any cinema operator in India as well as expanded to Sri Lanka with a 9 screen premium property

The company approved the fund raising of up to Rs. 300 crore through issuance of equity shares of face value of Rs. 10 each (“Equity Shares”) on rights issue basis ( as decided by the Board of Directors or the Fund Raise Committee ) to the eligible equity shareholders of the Company

Financial

ROE and ROCE is around 16% and 19% respectively and book value per share is around INR 198 and share is currently trading at 5.9x of its book value. Company is currently trading at annualized PE of around 210 which is too expensive as per Industry benchmark. Promoter holding is around 18.5% in the company which is too low. FIIs and Mutual fund hold around 38.3% and 20.0% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 787 Cr Vs. 829 Cr as of March 2019. Debt including lease liabilities is also increasing YoY and finance cost in this quarter is also too high which is around INR 481 Cr as of March 2020 Vs. 128 Cr in March 2019. 

Position: Share strong support price is INR 1,060/940. Long term investor can continue with the company based on their risk appetite.

Share View: Share price high 2,121 (52 week) and now 1,160 almost 50% corrected from their peak. PVR Ltd. is the largest and the most premium film exhibition company in India. Since its inception in 1997, the brand has redefined the cinema industry and the way people watch movies in the country. Currently PVR operates a cinema circuit of 845 Screens in 176 Properties in 71 Cities (India and Sri Lanka).

Opportunities:  PVR is monopolistic business in North India and currently No. 1 in country. due to cost optimization like reducing employee cost, overhead expenditure and other cost and rent waiver also company can survive in this pandemic. 

Risk: The current quarter Q1FY21 and Q2FY21 and Q3FY21 can be more challenging because Cinema is still shut and once opened still doubt they can generate good source of revenue in future. Further JIO Cinema is also providing more challenging since lockdown many series which releasing were pending directly released via OTT mechanism. The public perception also changed towards Cinema since proper social distancing with movie experience can be posed more challenging in future. Rent waiver is still in under discussion stage. Finance cost is also worried and continuously increased as company was aggressive to acquire the multiple deals in past.

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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