BRICS PCG: 'Buy' PVR Cinema

BRICS PCG has given a 'Buy' recommendation PVR Cinema with a target price of Rs 400.

PVR Cinema, the pioneer and largest operator, has been granted a licence to open its latest property 'PVR Mulund'. With 6 screens, it is the largest multiplex in Mumbai and it is eligible for a 5-year entertainment tax exemption. This property will take its screen count to 68 nationwide.

PVR is the only film exhibition company in India to have had an international film exhibition operator, Village Roadshow (VRL), as a strategic investor, which has helped it to design and set up world-class multiplexes.

With 16 existing properties and 62 screens, PVR is now pursuing plans to further multiply its properties and take its screen count to 250, so as to establish a pan-India presence. The stock is currently quoting at 26.4x on FY07E and 12.8x on FY08E earnings.