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) provides two precedents. One, particular format screens – the place PVR-Inox’s tickets are dearer – have been exempt. Two, it might face authorized hurdles.
Prior courtroom rulings – Excessive Courts in addition to Supreme Court docket – have struck down worth 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 complete yr income affect of price-cap can be ₹19.20 crore or 0.28 per cent of revenues . Field workplace assortment in This autumn (₹2,000 crore in January/February), alternatively, is wanting up. That, together with a wholesome pipeline, far outweighs price-cap fears.
As we famous in Fallacious Causality, latest correction was doubtless technical, which is behind. Actually, tailwinds are actually rising. Return of huge banner motion pictures, higher pipeline of Hollywood/Bollywood motion pictures (the place PVR-Inox has greater share) together with greater 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.
