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 may face authorized hurdles.
Prior court docket rulings – Excessive Courts in addition to Supreme Courtroom – have struck down worth regulation orders. Even when enforced, the influence can be miniscule. Assuming ATP (₹252 gross ATP) and occupancy ranges (24 per cent) for the steadiness screens to be similar as firm common, the total yr income influence 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 trying up. That, together with a wholesome pipeline, far outweighs price-cap fears.
As we famous in Improper Causality, latest correction was doubtless technical, which is behind. In reality, tailwinds at the moment are rising. Return of massive banner motion pictures, higher pipeline of Hollywood/Bollywood motion pictures (the place PVR-Inox has larger share) together with larger disposable revenue (on account of revenue tax reduction) ought to assist occupancies. Affordable valuations – 9x EV/EBITDA (pre IND AS) – restrict draw back. These are robust arguments to Purchase.
