Institutional Equities Mukta Arts 18 January 2017 Reuters: MUKR.BO; Bloomberg: MKTA IN Looking To Attain Critical Mass In Its ‘Affordable’ Positioning NOT RATED We had a meeting with Mr Rahul Puri, CEO of Mukta Arts (MAL) to understand its plans in Sector: Film Exhibition the film exhibition business. Despite starting out as a film production house of Mr. Subash Ghai in 1982, in FY16 its consolidated revenues were dominated by film exhibition CMP: Rs97 (50%) and education (31%). The film exhibition business was started in 2011. While players like PVR, Inox Leisure and Cinepolis cater to the mid to premium end customers Girish Pai in Tier-1 and Tier-2 cities, MAL is focused on providing affordable movie viewing in Tier-2 Head of Research and Tier-3 cities (as well as in Tier-1 cities selectively). While PVR’s current average ticket
[email protected] +91-22-3926 8017 price (ATP) is ~Rs200 and average F&B spend per head (SPH) is Rs85, the corresponding numbers for MAL are ~Rs120 and Rs33, respectively. While annual revenue per screen was ~Rs35mn for PVR it was ~Rs13mn for MAL in FY16. With EBITDA margin indicated to Key Data be broadly similar, EBITDA/screen difference between the two will mirror revenues. The Current Shares O/S (mn) 22.6 scale-up, which has been slow so far, has picked up considerable pace with likely doubling of screens by the end of FY17 from 36 screens (as of FY16-end). MAL is planning Mkt Cap (Rsbn/US$mn) 2.2/32.4 Update to hive off its film exhibition business into a 100% subsidiary and intends to scale up the 52 Wk H / L (Rs) 133/40 screen number to 200-250 in three years.