Although Nifty Media witnessed a gloomy 2019, the index's heavyweights i.e. PVR and Inox Leisure sure had a good year reporting healthy gains. However, one stock that has delivered the highest returns from the index is PVR. The movie distributor and producer rallied around 960 percent in the last 10 years, thus turning Rs 1 lakh to Rs 10,61,000.
When it comes to PVR's competitor, Inox Leisure only witnessed a rally of 445 percent in the last 10 years, turning Rs 1 lakh to Rs 5,45,000.
On a comparable basis of five years, the net sales and net profit of PVR jumped 109 percent and 1,487 percent respectively. In the case of Inox, the net sales rose 66 percent and profit after tax surged 566 percent. PVR has reported double the growth v/s Inox, in case of earnings.
Stock valuations and return-on-earnings is the only area where PVR lacks. The price-to-earnings ratio of PVR currently is at 58.46x, while Inox's is 25.55. Return-on-earnings is another factor to be considered here, where PVR delivered 15.78 percent, while Inox reported 17.04 percent.
Coming to brokerages' view, Edelweiss believes that Q3FY20 is likely to be one of the toughest quarters the media industry has seen in many years and likely the first of both revenue and EBITDA decline.
It said, "For PVR, we anticipate EBITDA margin to contract 50 bps owing to weak footfalls in Southern markets but PVR has a higher exposure to South India than Inox."
On contrast with Edelweiss, ICICI Securities stated that multiplexes remain the only segment that continues to deliver a strong performance notwithstanding the economic slowdown.
"Going ahead, we expect multiplexes to continue their organic expansion spree as the overall business economy remains favourable. While PVR is expected to add 75 screens for FY21, for Inox, we expect 60 screens addition for the year as few properties have faced delays due to approvals," said the brokerage.
Meanwhile, IDBI Capital expects PVR (ex-SPI Cinemas) to see footfall growth of 3 percent YoY and advertisement revenue growth of 7.4 percent YoY, much better than Inox.
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First Published: Jan 9, 2020 3:58 PM IST
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