PVR - 4QFY2012 Result Update - Angel Broking

PVR reported a loss of Rs.12.3cr for the quarter as against a loss of Rs.1.7cr in 4QFY2011. The increase in losses on a yoy basis was due to exceptional expense of Rs.14.5cr incurred on account of disputed service tax in the previous financial year and further ~Rs.6cr pertaining to the preceding three quarters.

Key highlights: For 4QFY2012, PVR reported a good performance on the revenue front. The company posted top-line growth of 32.9% yoy to Rs.117.2cr. Movie exhibition grew by 52.4% yoy and contributed Rs.104.4cr to the company's top line. Bowling Center recorded strong growth of 107.1% yoy and stood at Rs.6.8cr. However, movie production and distribution posted a 60.6% decline in revenue to Rs.7.3cr. OPM for the company contracted by 1,584bp yoy to 3.6% on account of 116% yoy increase in rental cost, as service tax on lease rentals pertaining to preceding three quarters was charged in this quarter (Rs.6cr), the levy of which is currently disputed at Supreme Court level.

Outlook and valuation: For FY2012-14E, we expect PVR to register a ~20% CAGR in its top line, aided by seat additions and higher contribution from bowling alleys. However, operating margin will remain under pressure on account of levy of service tax on lease rent. At the CMP of Rs.152, the stock is trading at 9.7x FY2014E EPS. We maintain Neutral view on the stock.

Source : Equity Bulls

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