Cinemax India - Exhibition business lists with a bang!!! - ICICIdirect

The erstwhile Cinemax India (CININD) demerged its exhibition business into a separate entity named Cinemax Exhibition India Limited. Post the demerger, the older company having interest only in the real estate business was renamed Cinemax Properties Limited (CININD) and Cinemax Exhibition India Limited was renamed Cinemax India Limited (CINMAX). Henceforth, we would resume coverage on Cinemax India Limited (Exhibition business).

Cinemax India reported net revenue of Rs.96.4 crore and PAT of Rs.9.3 Crore for Q1FY13. With 39 properties, 138 screens and 33535 seats, the company is a dominant player in the domestic Multiplex industry.

The company has clearly witnessed huge value unlocking in the exhibition business after demerger. The stock is currently trading at Rs 61, up from Rs.32 for the combined entity at the time of demerger.

Its comparable peer PVR Limited having 44196 seats and better KPIs is trading at 10.8x FY14E. We value the company at ~20% discount to PVR at 8.6 FY14E EPS of Rs.9.3 to arrive at a target price of Rs.80. We rate the stock as BUY.

Source : Equity Bulls

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