>PVR LIMITED: Marquee locations provide lucrative advertisement income

■ To add 50-60 screens across India – In the past, PVR has opened multiplexes at key locations by tying up with strong developers. It will continue this strategy and add over 50 screens across India in cities like Pune, Bengaluru, Cochin, Nagpur, Nanded and Vijaywada.


■ Industry growth should help maintain margins – We expect the movie industry to continue its growth which will lead to occupancy levels of 30% or higher. Rising ticket prices and food & beverage (F&B) sales will boost margins in the long run.


■ Marquee locations provide lucrative advertisement income – PVR is earning advertisement revenues which amount to 20% of net ticket sales due to its location strategy. This strategy is boosting margins and providing a kicker to the bottom line.


■ Bowling alley business to grow manifold - The number of bowling lanes should grow from 50 to 134 in the next couple of years. This business has a payback period of 2.5 years and ROCE of 29%. It will help the company become a one stop shop for retail entertainment and a leading anchor tenant for mall developers.


■ Implementation of GST would be a positive trigger as there will be a fall in the entertainment tax (e-tax) rate. Currently the company pays an average e-tax of over 18%. GST implementation will lead to a 1-2% fall in tax rate which can be retained by PVR.


To read report in detail: PVR LTD
RISH TRADER