Goal: ₹1,610
CMP: ₹915.70
Karnataka authorities has proposed an ₹200 price-cap for film tickets. This isn’t the primary time. Earlier try (2017) affords two precedents. One, particular format screens – the place PVR-Inox’s tickets are dearer – had been exempt. Two, it might face authorized hurdles.
Prior courtroom rulings – Excessive Courts in addition to Supreme Courtroom – have struck down value regulation orders. Even when enforced, the affect might be miniscule. Assuming ATP (₹252 gross ATP) and occupancy ranges (24 per cent) for the stability screens to be similar as firm common, the total 12 months income affect of price-cap could be ₹19.20 crore or 0.28 per cent of revenues . Field workplace assortment in This fall (₹2,000 crore in January/February), however, is trying up. That, together with a wholesome pipeline, far outweighs price-cap fears.
As we famous in Improper Causality, current correction was seemingly technical, which is behind. Actually, tailwinds are actually rising. Return of massive banner films, higher pipeline of Hollywood/Bollywood films (the place PVR-Inox has increased share) together with increased disposable revenue (attributable to revenue tax reduction) ought to help occupancies. Affordable valuations – 9x EV/EBITDA (pre IND AS) – restrict draw back. These are sturdy arguments to Purchase.
