PVR INOX Limited - Long-term rating upgraded to 'CRISIL AA/CRISIL PPMLD AA/Stable', short-term rating reaffirmed

CRISIL Ratings has upgraded its ratings on the long-term bank facilities, non-convertible debentures and long-term principal-protected market-linked debentures of PVR Inox Ltd (PVRINOX) to 'CRISIL AA/CRISIL PPMLD AA/Stable' from 'CRISIL AA-/CRISIL PPMLD AA-/Positive'. CRISIL Ratings has reaffirmed its 'CRISIL A1+' rating on the short term bank facilities and commercial paper of the company.

The rating upgrade reflects the strong market position of PVRNOX (largest multiplex operator with nearly four times the screens vis-à-vis its nearest competitor), improving operating efficiency aided by synergy benefits and premiumisation, and healthy financial risk profile. These strengths are partially offset by exposure to risks inherent in the film exhibition business.

A refreshed content pipeline helped increase footfall during the first nine months of fiscal 2024 on an expanded screen base and improved occupancy to 26.6% (26.2% for the corresponding period of the previous fiscal). The company reported its best-quarter-ever in terms of box-office collections (BOC) during the second quarter of fiscal 2024, supported by record collections from movies like Gadar 2, Jailer and Jawaan. It reported operating profit (ex-Ind AS-116 adjustment) of Rs 711 crore (operating margin of 14.6%) during the first nine months of fiscal 2024 against Rs 516 crore (proforma PVR INOX combined margin of 13.0%) for the corresponding period the previous fiscal. Healthy cash accrual on account of strong operating performance helped the company prepay some of its debt, with net debt falling to Rs 1,212 crore as on December 31, 2023, from Rs 1,430 crore as on March 31, 2023. The company had cash and equivalents of Rs 396 crore against external debt of Rs 1,608 crore as on December 31, 2023.

CRISIL Ratings expects net addition of 100-120 screens every year, which, along with maintenance-related capital expenditure (capex), will entail total annual capex of Rs 650-750 crore. This is expected to be funded largely through internal accrual and prudent use of debt.

Shares of PVR Limited was last trading in BSE at Rs. 1379.40 as compared to the previous close of Rs. 1361.95. The total number of shares traded during the day was 28295 in over 2534 trades.

The stock hit an intraday high of Rs. 1388.65 and intraday low of 1369.75. The net turnover during the day was Rs. 39050067.00.

Source : Equity Bulls

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PVRINOX INE191H01014 CreditRating Update RatingUpgrade Reaffirmed