PVR Limited Bloomberg Code: PVRL IN

Transcription

1 Scripting a Blockbuster Jul 24, 215 Consumer Discretionary Jul 24, 215 Bloomberg Code: PVRL IN India Research - Stock Broking Market leader in movie exhibition business: The company is expanding its market share in movie exhibition business through organic & inorganic routes. The company has market share of 29% in 215 with 53 screens post DT cinemas acquisition. The next phase of growth is likely to trigger from Tier-2 & Tier-3 cities through its expansion plans. Content is King, Strong content could increase footfalls: With an expected strong content lined up, the footfalls are likely to witness CAGR growth of 2% during FY15-17E. F&B & Advertisement revenues are likely to see CAGR growth of 35% & 24% respectively during FY15-17E. SPH is expected to reach Rs.8 in FY17E from 64 in FY15. Company is strengthening its leadership position post DT cinemas & Cinemax acquisitions: After acquisition of DT cinemas & Cinemax, the company has strengthened its leadership position in the movie exhibition business. DT cinemas currently operates around 62 seats across 29 screens with eight properties in NCR & Chandigarh. PVR has acquired DT cinemas for Rs 5Mn on slump sale basis in June 215, which is subject to Competition Commission of India (CCI) approval. The total number of DT screens are 39, out of which 29 screens are operational and 1 screens will be operational by FY17E. PVR well positioned to benefit from discretionary spending: The discretionary spending is likely to increase on the back of strong economic recovery. PVR could be one of the beneficiaries of discretionary spending. Valuation and Outlook At CMP of Rs.79, PVR is currently trading at 9.3x FY17E EV/EBITDA. We value the company at 11x of EV/EBITDA for FY17E EBITDA for a target price of Rs 933 based on the company future prospects. We therefore initiate coverage on PVR Limited (PVRL) with a BUY rating for a target price of Rs.933 representing an upside potential of 18% in a 9-12 month period. Key Risks ychange in the revenue sharing model between exhibitors & distributors. yincrease in entertainment taxes & lower footfalls. yquality of content. Recommendation (Rs.) BUY CMP 79 Target Price 933 Upside (%) 18 Stock Information Mkt Cap (Rs.mn/US$ mn) / wk High/Low (Rs.) 885 / 572 3M Avg. daily volume (mn).2 Beta (x).8 Sensex/Nifty / 8579 O/S Shares(mn) 41.5 Face Value (Rs.) 1. Shareholding Pattern (%) Promoters 29.5 FIIs 23.5 DIIs 7.7 Others 39.3 Stock Performance (%) 1M 3M 6M 12M Absolute Relative to Sensex Source: Bloomberg Relative Performance* Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 PVR Source: Bloomberg; *Index 1 Sensex Exhibit 1: Valuation Summary (Rs. Mn) YE Mar (Rs. Mn) FY13 FY14 FY15P FY16E FY17E Net Sales EBITDA EBITDA Margin (%) Adj. Net Profit EPS (Rs.) RoE (%) PE (x) ; *Represents multiples for FY13, FY14 & FY15 are based on historic market price For private circulation only. For important information about Karvy s rating system and other disclosures refer to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY<GO>, Thomson Publishers & Reuters Analysts Contact Uday Kiran Y uday.kiran@karvy.com Vignesh S B K vignesh.sbk@karvy.com 1

2 Jul 24, 215 Company Financial Snapshot (Y/E Mar) Profit & Loss (Rs. Mn) FY15P FY16E FY17E Net sales Optg. Exp (Adj for OI) EBITDA Depreciation Interest PBT Tax PAT Adj. PAT* Profit & Loss Ratios EBITDA margin (%) Net margin (%) P/E (x) EV/EBITDA (x) Dividend yield (%).1.1.1, *Including Minority Interest Balance sheet (Rs. Mn) FY15P FY16E FY17E Total Assets Net Fixed assets Current assets Other assets Total Liabilities Networth Debt Current Liabilities Deferred Tax Miscellenous Balance Sheet Ratios RoE (%) RoCE (%) Net Debt/Equity Equity/Total Assets P/BV (x) Exhibit 2: Shareholding Pattern (%) Company Background was incorporated in April 1995 pursuant to a joint venture between Priya exhibitors private limited and Village Road Show limited, Australia. The company instigated the multiplex revolution by establishing the first multiplex at Saket New Delhi, in the year Today PVR has a wide range of multiplexes across India with almost 53 screens at 16 locations across 43 cities in 15 states and 1 union territory. PVR offers a wide range of high-end hospitality and entertainment such as Directors Cut, which has various premium facilities such as 3D enabled technology, world class full sound systems, fully reclinable arm chair and an exciting in-seat F&B (Food and Beverages) menu. Apart from Directors Cut, PVR offers Directors Rare for niche audience who wish to watch alternate content on big screen. PVR Gold is a segment which offers premium experience for movie goers. The brand PVR is strengthening from time to time. Cash Flow (Rs. Mn) FY15P FY16E FY17E PBT Depreciation Interest (net) Tax (8) (283) (551) Changes in WC (942) Others (14) (62) (57) CF from Operations Capex (1572) (5315) (199) Investment 212 (8) 3 CF from Investing (136) (5323) (196) Change in Equity 4 35 Change in Debt (8) Others (1198) (1317) (1432) Dividends (46) (46) (46) CF from Financing (2278) Change in Cash (16) Exhibit 3: Revenue Segmentation: Product-wise (%) Others 39.3% Promoters 29.5% F&B 25% Advertsiement 12% Others 3% DIIs 7.7% FIIs 23.5% Tickets 6% 2

3 Consolidation in industry will lead to higher bargaining power for the leading multiplex players Jul 24, 215 India s Media & Entertainment Industry (M&E) is worth Rs.126 Bn at the end of 214 and is expected to grow at CAGR of 14% for the next five years and reach Rs.1964 Bn at the end of 219, according to KPMG. Indian M&E industry is estimated to grow twice at the rate of global M&E industry. Exhibit 4: India Media & Entertainment Industry: Size & Projections Overall industry size (Rs. Bn) India media & entertainment industry: Size & Projections Film industry plays an integral part of India s M&E industry which has share of 12.3% in 214. Size of film industry stood at Rs.126 Bn at the end of 214 and is expected to grow at CAGR of 1% and reach Rs.29 Bn at the end of 219. With more number of screens getting added annually and rise in consumer discretionary spending is likely to drive the growth of the Indian film industry. 75% of film industry revenues are contributed by the domestic theatrical revenues where movie exhibitors are involved. Exhibit 5: Film Industry Size & Forecast (Revenues Rs. Bn) % Segment share in Industry 215P 216P 217P 218P 219P 5 year CAGR ( ) % Market share in Industry TV Print Films Radio Music OOH Animation and VFX Gaming Digital Advertising Total Source: FICCI Report, Karvy Research P 216P 217P 218P 219P Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancillary Revenue Source: FICCI Report, Karvy Research Exhibit 6: Consumer spending trend of Indians by 22 Category Spending in $ Bn Spending in $ Bn % CAGR Growth % Segment Share in % Segment Share Rate Spending (21) in Spending (22) Food Housing & Consumer durables Transportation & Communication Education & Leisure Clothes & Footwear Health Others Source: Euro Monitor, National Sample Survey Office, Karvy Research 3

4 Low Density of Screens Jul 24, 215 India has approximately 96 screens out of which 18% of them are multiplex formats. Screen density in India is at 8 per mn is low compared to other nations such as China s 31 and USA which has 125 screens per million. Multiplex screen density in India is very negligible at ~2 per million indicating growth opportunities for the multiplex operators. India produced close to 12 movies in 214 which is one of the largest movie producers globally. However, India s box office collection stood at $1.6 Bn which is lower compared to other countries. China s box office collections for 214 stood at $4.5 Bn which is the second largest market for box office and has produced ~618 movies and has close to 22 screens. In India, movies are one of the cheapest forms of entertainment compared to theme parks, plays, music concerts & sports. Exhibit 7: Screen penetration is lowest in India Exhibit 8: Domestic Box Office Collections (in $ Bn) US France Spain UK Germany Japan China India Screens per million CY9 CY1 CY11 CY12 CY13 CY14 China India Source: FICCI, Karvy Research Source: SAPPRFT, Karvy Research Exhibit 9: Global Box Office Collections ($ Bn) US/Canada China Source: MPAA, Karvy Research Japan France U.K India S. Korea Germany Russia Australia Exhibit 1: Correlation between No. of Screens and GBOC 25 Exhibit 11: Number of Movies Produced Annually China box office collections ($ Mn) No of screens 1255 India 819 USA 584 China 441 Japan 299 UK 272 France Movies produced 216 Rep of Korea 212 Germany 199 Spain 155 Italy Source: SAPPRFT, Karvy Research Source: UNESCO Institute of Statistics, Karvy Research 4

5 Jul 24, 215 Exhibit 12: Cheapest form of Entertainment Price Range (Rs.) Multiplex Tickets 8-5 Sport Events 15-2 Plays 5-3 Live Concert 5-2 Theme Parks 5-35 Source: Book My Show, Karvy Research Exhibit 13: Footfalls in major countries ( In Mn) India 294 USA 1284 China 37 France 217 Mexico 25 UK 172 Rep of Korea 16 Russia 153 Japan 145 Brazil Source: UNESCO Institute of Statistics, Karvy Research Exhibit 14: Market share of Movie Exhibitors Major Players Number of Screens Market Share in 214 (%) PVR Inox Big Cinemas Cinepolis 84 5 Fun Cinemas 73 5 Carnival 5 3 SRS Cinemas 39 2 Satyam Cinemas (Delhi) 39 2 SPI Cinemas 3 2 DT Cinemas 29 2 Wave 24 2 Movie time 29 2 Others Total 16 1 The rise of multiplexes Single screen operators have been under stress in the last few years mainly because of digitization of screens, lower occupancy rates, unfavorable revenue sharing model, rising costs and competition from multiplex players who provide better movie watching experience. Last couple of years was important for film exhibition business not because of its content but for the consolidation which lead to the emergence of 4 major players in the industry. PVR has acquired DT cinemas which gave leeway to strengthen its market share further. Carnival, which was small player, has entered into top league after buying out Big cinemas and another major player Cinepolis, the Mexican player, has bought out Fun cinemas which was the fifth largest player in India. Source: Respective companies, Karvy Research Exhibit 15: Consolidation Pattern in Indian Movie Exhibition Industry Major Players Number of Screens 215* Exhibitor Acquired Screens Total No of screens 215* (Including Acquisition) Market Share (%) PVR 464 DT Cinemas Inox 334 Satyam Cinemas Big Cinemas 252 Carnival 54 Stargaze Entertainment HDIL Broadway 1 Cinepolis 11 Fun Cinemas SPI Cinemas SRS Cinemas Wave Cinemas Movie time Others Total Source: Respective companies, Karvy Research, * 215 Year to Date 5

6 Jul 24, 215 With leading exhibitors on full scale to ramp up their number of screens in next few years, we expect the scenario to shift in the favor of movie exhibitors as they gain market share in the industry. Players such as PVR which is expected to surpass 1 screens in next couple of years will have bargaining power over distributors and advertisers which augurs well for the company. Exhibit 16: Distributors Share Exhibit 17: Target Vs Existing Week 1 Week 2 Week 3 Thereafter (%) (%) (%) (%) Multiplex SPI Cinemas Cinepolis Single Screens Carnival Inox PVR Target Source: Respective companies, Karvy Research PVR expanding its presence and strengthening its presence in Movie Exhibition industry Exhibit 17: No of Screens Additions by PVR & its Competitors FY12 FY13 FY14 FY15 FY16E FY17E PVR INOX PVR has 53 screens and is the largest player in Indian multiplex industry with market share of 29%. The company is planning to add 6 screens per annum for the next couple of years and has target of 1 screens by 218. The target of 1 screens can be achieved by aggressive expansion and through inorganic route. The capex required for a screen is Rs.2 mn and capex of Rs mn would be required per annum for the addition of targeted 6-7 screens. The average ticket price & spent per head is likely to increase on the back of expansion plans. Exhibit 19: Movie Pipeline 215 Month-wise Movie Cast July Bajrangi Bhaijaan Salman Khan, Kareena Kapoor Drishyam Ajay Devgan August Brothers Akshay Kumar, Jacqueline Fernandez All is well Abishek Bachchan, Asin Phantom Saif Ali Khan, Katrina Kaif September Welcome Back John Abraham, Shruti Hassan Katti Batti Imran Khan, Kangana Ranaut October Rocky Handsome John Abraham, Shruti Hassan Singh is Bling Akshay Kumar, Amy Jackson Shaandaar Shahid Kappor, Alia Bhatt November Prem Ratan Dhan Payo Salman Khan, Sonam Kapoor Tamasha Ranbir Kappor, Deepika Padukone December Bajirao Mastani Ranveer Singh, Deepika Padukone Dilwale Shahrukh Khan, Kajol Hera Pheri Paresh Rawal, Sunil Shetty 216 Month-wise Movie Cast January Airlift Akshay Kumar, Nimrat Kaur January Baadshaho Ajay Devgan April Fan ShahRukh Khan Source: Karvy Research 6

7 Jul 24, 215 Recently, dubbing of Hollywood movies in southern languages has lead to popularity of these movies. Hollywood movies box office collections are on the rise on the back of rising popularity of Sequels, 3D animation movies and aspiring middle class people. Hollywood movies contribute only 7%-1% of total box office collections and ATP is higher by 5% to 15% for these movies. Exhibit 2: Hollywood movies GBOC 214 (Rs. Mn) 215 Month-wise Movie Amazing Spider Man Transformers 4: Age of Extinction 63 X- Men: Days of Future past 566 Interstellar 432 3: Rise of an Empire 41 Godzilla 34 Captian America: The Winter Soldier 31 Hercules 29 Dawn of the planet of Apes 224 Exodus: Gods & kings 189 Source: FICCI, Karvy Research Exhibit 21: Regional Movies in 214 Movie Language Gross Box office (Rs. Mn) Lingaa Tamil 148 Veeram Tamil 13 Kathi Tamil 124 Chaar Sahibzaade Punjabi 7 Race Gurram Telugu 59 Vella Illa Pattathari Tamil 53 Bangalore Days Malayalam 5 Source: Karvy Research Regional movies have seen phenomenal growth and have gained pan Indian attention with recent movies such as I & Bahubali which are rich in technical content and to join Rs 1 mn club which was previously achievable only for Bollywood movies. Now with more regional movies joining Rs 1 mn club, the box office collections are on the rise and is benefiting the multiplex players, previously dependent solely on Bollywood movies. Multiplex players expanding into Tier-2 and Tier-3 cities, contribution from regional cinemas is expected to increase to the total box office collections as patrons are more familiar with regional content. Exhibit 22: Major Circuit Contributions for the Box Office Collections (%) Though contributions from Hollywood movies and regional movies are on the rise, Bollywood is still the major contributor to the Indian Box office collections and is solely dependent on the couple of circuits of Mumbai & Delhi/UP circuit which contribute 6% of the total collection of Bollywood movies. Popular actors movies are lined up for FY16E which will be helpful for pulling crowd to the multiplexes and improving the occupancy ratios. Mumbai Delhi/UP Circuits Source: FICCI, Karvy Research Exhibit 23: Ad Revenue Growth ( %) TV Print Digital Out of home Radio Cinema Size of in-cinema advertising is estimated to reach Rs Bn in 219 from Rs.4.9 Bn in 214, growing at CAGR of 29%. With digital cinema, movies are released in more number of theatres and addition of screens by movie exhibitors provides scope for increasing the ad rates. Rates for ads change depending upon the timing such as screening it before the movie begins or during the interval slot or during the opening weekends for the movies. India cinema advertising grew at 25% in 214 and is expected to grow at 2% in 215 & 216 supported by sectors such as FMCG & services sectors, who are major advertisers. 7

8 Jul 24, 215 In India, Entertainment industry, especially the movie exhibition business is under-screened when compared to population i.e. with 8 screens per Mn. Hence, there is a scope for huge growth across various geographies in the country. Entertainment industry, which is likely to benefit from increase in consumer spending and rollout of GST (Goods & Service Tax), is back on the growth track. With huge content pipeline, quality content expected to be released in future, we expect the entertainment industry to grow significantly in the coming years. Pricing remains a key driver of revenue for the industry. Increase in the ticket prices can lead to higher revenues provided if it is price inelastic. Average ticket price is likely to be higher in the coming years with increase in footfalls on back of expected quality content. The industry expects the government to relax regulations on fixed number of shows and cap on ticket pricing in selected states so that the exhibitors can decide on the ticket prices according to market forces. Digitization has brought a tremendous change in the cinema industry. Reduced cost of prints, low storage costs and curtailment of piracy are some of the advantages offered by digitization. Screening of movies from physical prints to digital movies has brought a dramatic change in the entertainment industry. Access to differentiated content like 3D technology is gaining significant prominence in India. Online sale of tickets has brought transparency over the years. This is likely to grow over a period of time due to expansion of markets in Tier-2 & Tier-3 cities. Major growth is likely to come from Tier-2 & Tier-3 cities in terms of growth in multiplexes. Shortening of movie life: The movie life is getting shortend as the first week & weekend contribute almost 7% of film s total collection. Considering this scenario, multiplexes are experimenting with pricing strategies to maximize revenue thereby adopting a differential pricing model for weekdays and weekends, and hence to maximize footfalls across the week. High entertainment tax acts as a major hindrance to the growth of exhibition industry. We expect that the entertainment tax will be rationalized in the coming years on implementation of GST. Finally, the future trend is likely to change from multiplexes to megaplexes going forward which can bring economies of scale for the industry. 8

9 Jul 24, 215 Exhibit 24: Business Assumptions Y/E Marc (Rs. Mn) FY14 FY15E FY16E FY17E Comments Consolidated Revenue Revenue Growth (%) EBITDA EBITDA Margins (%) PAT (normalized) EPS We expect the revenues to grow by 34.46% from FY15-FY17E. The increase in revenues is expected to grow on the back of higher ticket price, higher F&B revenues and increase in advertisement income. We expect EBITDA margins to improve from 13.9% in FY15 to 15.8% by FY17E. The EBITDA margins are likely to improve on quality content in the coming year which can increase footfalls. PAT is likely to improve significantly due to increase in the base of the company and significant expansion plans or addition of screens in Tier-2 & Tier-3 cities. Net CFO The free cash flows are likely to improve in the Net Debt coming years on the back of higher disposable income from patrons & pricing power for the Free cash flow 859 (552) (2142) 2925 company. Exhibit 25: Karvy vs Consensus Revenues (Rs. Mn) Karvy Consensus Divergence (%) Comments FY16E We expect the revenues to grow significantly on FY17E higher ATP, SPH and advertisement revenues. EBITDA (Rs. Mn) FY16E Increase in EBITDA is due to increase in FY17E EPS (Rs.) expected footfalls. FY16E (16.7) Fresh issue of shares has been taken into account and also conservative estimates have FY17E (8.) been considered. Source: Bloomberg, Karvy Research 9

10 Company Outlook: Jul 24, 215 PVR is aiming to have 1 screens by 218. With the consolidating leadership position, we expect PVR to consistently improve its pricing power with regard to ATP, SPH & advertisement revenues. Apart from the movie exhibition business, PVR is engaged in bowling business, movie production business & food court business. PVR has decided to be conservative in bowling & movie production businesses. Finally, GST rollout can improve margins which will lead to lower entertainment tax. Exhibit 26: Average Ticket Price FY14 FY15 FY 16E FY 17E Average Ticket Price (Rs.) Average Ticket Price (ATP): On the expectation of strong content and with whooping consolidation in the sector, i.e. acquisition of DT cinemas and Cinemax by PVR, the average ticket prices are likely to trend higher in the coming years for the company. We expect the company to maintain its leadership position and maintain high pricing power as a result of which the ATP is likely to 4.96% FY15-17E CAGR. Exhibit 27: Advertisement Revenues / Screens FY14 FY15 FY 16E FY 17E Advt revenue/screen (Rs. Mn) The advertisement income contributes almost 12% of revenues. With the base of operations expanding for the PVR, we expect the advertisement revenues to improve as the company has the pricing power across premium localities. We expect the advertisement revenue per screen to improve going forward from Rs. 3.6 Mn per screen in FY15 to Rs. 3.9 Mn per screen in FY16E & to Rs. 4.2 Mn per screen in FY17E. i.e. CAGR growth of 8.53% from FY15 to FY17E. Exhibit 28: PVR-DT Cinemas Deal Location No of Screens City Vasant Kunj 7 Delhi Saket 6 Delhi Mega mall 3 Gurgaon City Centre 3 Gurgaon Shalimar bagh 4 Delhi Chandigarh 3 Chandigarh Star mall 2 Gurgaon DT G.K -II 1 Delhi PVR cinemas has acquired DT cinemas on a slump sale basis for Rs. 5 Mn. The deal is subject to CCI approval. The deal includes acquisition of 39 screens out of which 29 screens are operational and 1 screens are to be operational by FY17E. The present 29 screens include 62 seats. The ATP and SPH of DT cinemas are 4% and 45% higher than that of PVR respectively. The cost of refurbishing of DT cinemas will not be significant as the infrastructure of DT cinemas is good. The advertising revenues are likely to be higher due to prime locations. Though the deal seems to be expensive on EV/Screen basis of around Rs Mn when compared to earlier deals in the industry, the higher valuations can be justified by the premium locations where the DT cinemas is located. 1

11 Jul 24, 215 Exhibit 29: Consistent Growth in Revenues FY13 FY14 FY15 FY16E FY17E Revenues (Rs. Mn) Growth (%) (RHS) The revenues expected to grow at 34.5% CAGR for the period FY15-FY17E. Due to expected increase in the base of the operations in the coming years, all the revenue generating parameters such as ATP, SPH and advertisement revenues are likely to improve. The differential ticket pricing strategies will benefit the company to increase revenues i.e. weekend pricing & week days pricing with regard to various segments in which it operates. Exhibit 3: EBITDA Margins to Improve FY 13 FY 14 FY 15 FY 16E FY 17E EBITDA (Rs. Mn) Margin (%) (RHS) EBITDA is expected to grow at CAGR of 44% for FY15-FY17E and margins are likely to improve from 13.9% in FY15 to 15.8% in FY17E on the back of higher realization on increase in tickets prices, SPH and increase in advertisement revenues. We expect F&B segment to contribute significantly with rise in volumes. Exhibit 31: Interest Coverage Ratio FY 13 FY 14 FY 15 FY 16E FY 17E EBIT (Rs. Mn) Interest expenses (Rs. Mn) ICR (x) (RHS) Interest expenses are increasing consistently on significant expansion. The interest expenses are likely to rise in the coming years on the back of expansion in Tier-2 & Tier-3 cities. The interest expenses are likely to increase from Rs. 783 Mn in FY15 to Rs. 876 Mn in FY17E. The increase in interest expenses is justified by expansion plans of the company. The interest coverage ratio is likely to be around 2.2x for FY16E & 3.1x for FY17E which are at comfortable levels. Exhibit 32: Debt - Equity Ratio FY 13 FY 14 FY 15 FY 16E FY 17E. Debt (Rs. Mn) Equity (Rs. Mn) Debt-equity ratio The debt levels are expected to rise on expansion plans in Tier-2 & Tier-3 cities. Debt-equity ratio is likely to be.9x in FY16E &.7x in FY17E. The debt-equity ratio is likely to settle at comfortable levels in the coming years. 11

12 Jul 24, 215 Exhibit 33: Company Snapshot (Ratings) Low High Quality of Earnings 33 Domestic Sales 33 Exports 33 Net Debt/Equity 33 Working Capital requirement 33 Quality of Management 33 Depth of Management 33 Promoter 33 Corporate Governance 33 Valuation & Outlook At CMP of Rs.79, PVR is currently trading at 9.3x FY17E EV/EBITDA. We value the company at 11x of EV/EBITDA for FY17E EBITDA for a target price of Rs.933 based on the company future prospects. We therefore initiate coverage on (PVRL) with a BUY rating for a target price of Rs.933 representing an upside potential of 18% in a 9-12 month period. Exhibit 34: PB Band 8 Exhibit 35: EV/EBITDA band Jul-1 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 PB Average SD1 SD2-1SD 2 1 Jul-1 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 EV/EBITDA Average SD1 SD2-1SD Exhibit 36(a): Comparative Valuation Summary CMP (Rs.) Mcap EV/EBITDA (x) P/E (x) EPS (Rs.) (Rs. Mn) FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E PVR Inox Exhibit 36(b): Comparative Operational Metrics Summary CAGR % (FY15-17E) RoE (%) Price Perf (%) Net Sales (Rs. Mn) Sales EBITDA FY15 FY16E FY17E 3m 6m 12m FY15 FY16E FY17E PVR Inox

13 Jul 24, 215 Key Risks ychange in the revenue sharing model between exhibitors & distributors. yincrease in entertainment taxes & lower footfalls. yquality of content. 13

14 Jul 24, 215 Financials Exhibit 37: Income Statement YE Mar (Rs. Mn) FY13 FY14 FY15P FY16E FY17E Revenues Growth (%) Operating Expenses EBITDA Growth (%) (3.3) Depreciation & Amortization EBIT Interest Expenses PBT Tax (124) Adjusted PAT Growth (%) (69.9) Exhibit 38: Balance Sheet YE Mar (Rs. Mn) FY13 FY14 FY15P FY16E FY17E Cash & Equivalents Sundry Debtors Inventory Loans & Advances Investments Net Block CWIP Miscellaneous Total Assets Current Liabilities & Provisions Debt Other Liabilities Total Liabilities Shareholders Equity Reserves & Surplus Networth Minority Interest Total Liabilities

15 Jul 24, 215 Exhibit 39: Cash Flow Statement YE Mar (Rs. Mn) FY13 FY14 FY15P FY16E FY17E PBT Depreciation Interest Tax Paid 8 (154) (8) (283) (551) Inc/dec in Net WC (25) 91 (942) Other Income 1 (66) (14) (62) (57) Cash flow from operating activities Inc/dec in capital expenditure (3666) (1273) (1572) (5315) (199) Inc/dec in investments (343) (8) 3 Others (441) Cash flow from investing activities (849) (165) (136) (5323) (196) Inc/dec in borrowings 4533 (433) (8) Issuance of equity Dividend paid (46) (46) (46) (46) (46) Interest paid (43) (812) (783) (834) (876) Others (416) (483) (555) Cash flow from financing activities 7289 (117) (2278) Net change in cash 431 (13) (16) Source: Company, Karvy research Exhibit 4: Key Ratios YE Mar FY13 FY14 FY15P FY16E FY17E EBITDA Margin (%) EBIT Margin (%) Net Profit Margin (%) Dividend Payout ratio Net Debt/Equity RoE (%) RoCE (%) Exhibit 41: Valuation Parameters YE Mar FY13 FY14 FY15P FY16E FY17E EPS (Rs.) DPS (Rs.) BV (Rs.) PE (x) P/BV (x) EV/EBITDA (x) EV/Sales (x) ; *Represents multiples for FY13, FY14 & FY15 are based on historic market price 15

16 Jul 24, 215 Stock Ratings Absolute Returns Buy : > 15% Hold : 5-15% Sell : <5% Connect & Discuss More at (Toll Free) research@karvy.com Live Chat f in You Tube Disclaimer Analyst certification: The following analyst(s), Uday Kiran Y & Vignesh S B K, who is (are) primarily responsible for this report and whose name(s) is/are mentioned therein, certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report. Disclaimer: Karvy Stock Broking Limited [KSBL] is a SEBI registered Stock Broker, Depository Participant, Portfolio Manager and also distributes financial products. The subsidiaries and group companies including associates of KSBL provide services as Registrars and Share Transfer Agents, Commodity Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory services, insurance repository services, financial consultancy and advisory services, realty services, data management, data analytics, market research, solar power, film distribution and production, profiling and related services. Therefore associates of KSBL are likely to have business relations with most of the companies whose securities are traded on the exchange platform. The information and views presented in this report are prepared by Karvy Stock Broking Limited and are subject to change without any notice. This report is based on information obtained from public sources, the respective corporate under coverage and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of KSBL. While we would endeavor to update the information herein on a reasonable basis, KSBL is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent KSBL from doing so. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. KSBL will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither KSBL nor any associate companies of KSBL accepts any liability arising from the use of information and views mentioned in this report. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Past performance is not necessarily a guide to future performance. Forward-looking statements are not predictions and may be subject to change without notice. Actual results may differ materially from those set forth in projections. y Associates of KSBL might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. y Associates of KSBL might have received compensation from the subject company mentioned in the report during the period preceding twelve months from the date of this report for investment banking or merchant banking or brokerage services from the subject company in the past twelve months or for services rendered as Registrar and Share Transfer Agent, Commodity Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory services, insurance repository services, consultancy and advisory services, realty services, data processing, profiling and related services or in any other capacity. y KSBL encourages independence in research report preparation and strives to minimize conflict in preparation of research report. y Compensation of KSBL s Research Analyst(s) is not based on any specific merchant banking, investment banking or brokerage service transactions. y KSBL generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. y KSBL or its associates collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. y KSBL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report and have no financial interest in the subject company mentioned in this report. y Accordingly, neither KSBL nor Research Analysts have any material conflict of interest at the time of publication of this report. y It is confirmed that KSBL and Research Analysts, primarily responsible for this report and whose name(s) is/ are mentioned therein of this report have not received any compensation from the subject company mentioned in the report in the preceding twelve months. y It is confirmed that Uday Kiran Y & Vignesh S B K, Research Analyst did not serve as an officer, director or employee of the companies mentioned in the report. y KSBL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. y Neither the Research Analysts nor KSBL have been engaged in market making activity for the companies mentioned in the report. y We submit that no material disciplinary action has been taken on KSBL by any Regulatory Authority impacting Equity Research Analyst activities. Karvy Stock Broking Limited Plot No.31, 6th Floor, Karvy Millennium Towers, Financial District, Nanakramguda, Hyderabad, 5 32, India Tel: ; Fax: For More updates & Stock Research, visit 16