PVR a Compelling Buy @ 93 - Some Opportunities Should Not be Missed
Price: Rs 93.5
Market Cap: Rs 250 Crs
Debt: Rs 180 Crs
Enterprise Value: Rs 430 Crs
Only owned Property at Phoenix Mills: Company is trying to sell it for over Rs100 Crs to Fund expansion going ahead.
No of Screens Currentlly: 142
Add for FY2012 : around 60 odd screens
Why is it a Buy???????????????????????????
1) Strong Brand -No Doubt Established among the top multiplex spaces. I alaways prefered Inox to PVR(Had suggested to buy Inox in a staggered way at Rs 50). But the recent correction in the last week made me thing again. Both are Buys @ Current levels of Rs 47 for inox and Rs93 for PVR.
2) Aggressive expansion: As per PVR they tend to add 60-80 screens by March 2012. Currently PVR has 142 screens so it takes the tally to around 200 screens.
3) PVR is expected to generate EBIDTA of about 100 Crs for FY12 AND if we consider 20-25 Crs as Interest payments 75 -80 Crs is left. I am not looking at the PAT because depriciation expenses are higher and do not reflect the true picture.
Value + Margin of Safety
I donot write as much as i had intented to do when i set up the blog but whenever a mispriced opportunity exist would be back.
1) For whatever reason Today we have PVR @ RS 250 ODD Crs Market Cap whereas a competitor is trading at the same Value of Rs 240 Crs :refering to Fame India (open offer takeover dont bother see the hidden value of PVR as a stanalone entity.
Indias top Multiplex at the same value as compared to a company which is not even half its size
Opporunities like these rarely come;and should be utilised to Make $$$$$.
Buy and hold for a year:Double your money.
Buying at the Right Price is the Most important thing
PVR Offers a great risk reward ration at these levels. For Inox refer previous article. CU At the movies Good luck
Aditya
