Result Update October 30, 2017

Rating matrix Rating : Hold PVR Ltd (PVRLIM) | 1420 Target : | 1440 Target Period : 12 months Potential Upside : 1% Relatively weak content during quarter… What’s changed?  Topline at | 555.4 crore was largely in line with our estimate of Target Unchanged | 561.3 crore. The company reported net ticketing revenue of | 299.3 EPS FY18E Changed from | 26.7 to | 27.4 crore (up 7.6% YoY but strictly not comparable owing to exclusion of EPS FY19E Changed from | 37.3 to | 37.4 Rating Unchanged government subsidy provided by various state governments under previous tax regime). Footfalls at 18.7 million, up 1.1% YoY (down Quarterly performance 5% YoY on a comparable basis), were muted owing to weaker than Q2FY18 Q2FY17 YoY (%) Q1FY18 QoQ (%) anticipated performance of star studded movies like Jab Harry Met Revenue 555.4 554.2 0.2 636.6 -12.8 Sejal, Simran, Jagga Jaasoos. Ad revenues were up 10.2% YoY to EBITDA 90.5 93.0 (2.7) 112.0 -19.2 | 68.8 crore. Given the higher tax incidence (~18% currently vs. 12% EBITDA(%) 16.3 16.8 -49 bps 17.6 -130 bps earlier), F&B revenues grew a meagre 1.8% YoY to | 142.3 crore, PAT 25.2 29.1 (13.6) 44.5 NM despite 8.3% growth in SPH to | 91  EBITDA came in at | 90.5 crore vs. estimate of | 87.0 crore owing to Key financials lower rental and employee expenses. Hence, EBITDA margins came | Crore FY16 FY17 FY18E FY19E in at 16.3%, better than our estimate of 15.5% Net Sales 1,752 2,044 2,354 2,687  PAT came in at | 25.2 crore, better than our estimate of | 22.4 crore EBITDA 324 357 395 489 aided by a superior operating performance and lower depreciation Net Profit 98 96 128 175 EPS (|) 21.0 20.5 27.4 37.4 and interest cost

Muted quarter; Q3 slate looks strong Valuation summary Q2 was relatively a weak quarter for PVR as weaker than anticipated run FY16 FY17 FY18E FY19E of Jab Harry met Sejal, Jagga Jasoos, Simran, etc, coupled with a heavy P/E 67.6 69.3 51.8 38.0 base quarter (Sultan & Rustom) led to softer footfalls. The performance in Target P/E 68.5 70.2 52.5 38.5 Q3FY18, so far, remains quite strong with releases such as Judwa 2 and EV / EBITDA 21.4 20.5 18.5 14.8 P/BV 7.5 6.9 6.1 5.3 Golmaal Again being superhits. Furthermore, the quarter is lined up with RoNW (%) 12.0 10.2 11.9 14.0 a star studded slate such as Padmavati and Tiger Zinda Hai. PVR being a RoCE (%) 16.1 13.7 15.6 18.3 market leader in the multiplex space would be a beneficiary of such a strong box office performance. We expect PVR to exhibit footfall growth Stock data of 9.4% CAGR in FY17-19E to 89.9 million aided by new screen additions Particulars Amount & good content, thereby leading to 13.7% CAGR in net ticketing revenues Market Capitalization (| Crore) 6,637.1 to | 1454.7 crore by FY19E. Total Debt (FY17) (| Crore) 730.1 SPH, advertisment to remain robust… Cash (FY17) (| Crore) 29.9 EV 7,245.8 The quarter saw stellar 8.3% YoY growth in SPH to | 91. However, given 52 week H/L 1655 / 1006 the higher tax incidence (~18% currently vs. 12% earlier), F&B revenues Equity capital 46.7 grew a meagre 1.8% YoY to | 142.3 crore. Going ahead, we expect F&B Face value 10.0 revenues to grow at 10.2% CAGR (lower than earlier estimates as we build in higher tax incidence) in FY17-19E to | 669.1 crore driven by 4% Price performance CAGR in SPH over FY17-19 to | 87.5. The company continued to deliver 1M 3M 6M 12M on the advertisement revenue front, which grew 10.2% YoY to | 67.4 PVR 17.3 5.0 -10.5 15.3 crore. The management has guided for 15-18% growth in ad revenues Inox 2.4 -12.1 -22.4 -14.0 over the next couple of years. We expect PVR to post 17.8% CAGR in FY17-19E to | 340.0 crore in its advertisement revenues. Research Analyst Valuations rich; maintain HOLD with target price of | 1440 Bhupendra Tiwary PVR remains a key play on multiplex industry given its leadership and [email protected] premium positing. However, the stock appears expensive (trading at the higher end of historical EV/EBITDA range of 10-15x) on the valuations Sameer Pardikar front vis-à-vis Inox (trading at 9.7x FY19E EV/EBITDA, 34% discount to [email protected] PVR) which has better levers for growth as it ramps up its ad revenues. Furthermore, there is an uncertainty over the implementation of local

body tax, while at the present form, GST is largely a neutral affair. We

continue to prefer Inox over PVR. We maintain our HOLD rating on PVR and value it at 15x FY19E EV/EBITDA, arriving at a target price of | 1440.

ICICI Securities Ltd | Retail Equity Research

Variance analysis Q2FY18 Q2FY18E Q2FY17 Q1FY18 YoY (%) QoQ (%) Comments Revenue 555.4 561.3 554.2 636.6 0.2 -12.8 Net ticketing revenues were up 7.6% YoY at | 299.3 crore. Ad revenues were up 10.2% YoY to | 68.8 crore. Given the higher tax incidence (~18% currently vs. 12% earlier), F&B revenues grew by a meagre 1.8% YoY despite 8.3% growth in SPH to | 91 Other Income 4.2 8.0 4.9 16.4 -14.4 -74.7

Employee Expenses 58.7 67.5 54.4 67.9 7.8 -13.7 Film Distributors share 133.5 122.8 114.4 144.9 16.6 -7.9 F&B Cost 38.5 37.2 35.6 41.3 8.0 -6.8 Rent 97.2 110.6 95.3 108.5 1.9 -10.5 Input credit on rental expenses led to lower costs during the quarter Repairs and Maintenance 137.1 136.1 161.4 162.0 -15.0 -15.4

EBITDA 90.5 87.0 93.0 112.0 -2.7 -19.2 EBITDA was higher led by lower rental and employee expenses EBITDA Margin (%) 16.3 15.5 16.8 17.6 -49 bps -130 bps Depreciation 34.7 38.6 34.6 37.6 0.3 -7.8 Interest 20.7 22.2 19.3 20.8 7.1 -0.6 Less: Exceptional Items 0.6 0.0 0.0 0.0 NA NA Total Tax 14.0 11.6 14.9 25.8 NA -45.8 PAT 25.2 22.4 29.1 44.5 -13.6 NM PAT was higher boosted by a superior operating performance

Key Metrics Footfalls (mn) 18.7 18.3 18.5 21.0 1.1 -11.0 Footfalls were muted owing to the weaker than anticipated performance of star studded movies like Jab Harry Met Sejal, Simran, Jagga Jaasoos Occupancy (%) 29.6 29.9 32.1 35.1 -7.8 -15.7 SPH (|) 91.0 87.8 86.8 87.0 4.9 4.6 ATP (|) 204.0 210.1 202.0 214.0 1.0 -4.7

Source: Company, ICICIdirect.com Research

Change in estimates FY18E FY19E (| Crore) Old New % Change Old New % Change Comments Revenue 2,384.9 2,353.9 -1.3 2,743.8 2,686.8 -2.1 We have realigned our estimates based on H1FY18 performance & exclude Blu O revenues (now sold) EBITDA 387.0 394.9 2.0 494.7 489.2 -1.1 EBITDA Margin (%) 16.2 16.8 55 bps 18.0 18.2 18 bps PAT 124.7 128.0 2.7 174.1 174.5 0.2 EPS (|) 26.7 27.4 2.7 37.3 37.4 0.2

Source: Company, ICICIdirect.com Research

Assumptions Current Earlier Comments FY16 FY17E FY18E FY19E FY18E FY19E Footfalls (mn) inclusive of DT Cinemas69.6 75.2 79.9 89.9 79.8 89.6 We have realigned our estimates based on H1FY18 performance SPH (|) 72.0 81.0 87.1 87.5 84.5 88.1 ATP (|) 188.0 196.0 205.7 212.8 207.1 214.3

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 2

Company Analysis Factoring in footfall growth of 8.3% CAGR in FY17-19E Q2 was relatively weak for PVR as the weaker than anticipated run of Jab Harry met Sejal, Jagga Jasoos, Simran etc, coupled with a heavy base quarter (Sultan & Rustom) led to softer footfalls at 18.7 million, up 1.1% YoY (down 5% YoY on a comparable basis). The company reported net ticketing revenues of | 299.3 crore (up 7.6% YoY but strictly not comparable owing to exclusion of government subsidy provided by various state governments under previous tax regime). The performance in Q3FY18, so far, remains quite strong with releases such as Judwa 2 and Golmaal Again being superhits. Furthermore, the quarter is lined with a star studded slate such as Padmavati and Tiger Zinda Hai. PVR being a market leader in the multiplex space would be a beneficiary of such a strong box office performance.

We expect PVR to exhibit footfall growth of 9.4% CAGR in FY17-19E to 89.9 million aided by new screen additions & good content, thereby leading to 13.7% CAGR in net ticketing revenues to | 1454.7 crore by FY19E. ATP is expected to grow at 4.2% CAGR in FY17-19E to | 212.8.

Exhibit 1: ATP trends

220 213 206 210 196 200 188 190 181

(|) 180 165 170 160 150 FY14 FY15 FY16 FY17E FY18E FY19E

Source: Company, ICICIdirect.com Research

Exhibit 2: Q3FY18 Bollywood content slate ahead Rukh Manoj Bajpayee, Adarsh Gourav,Smita Tambe 27 October ’17 Jia Aur Jia Richa Chadha,Kalki Koechlin,Sol Roach 27 October ’17 Ittefaq Sidharth Malhotra,Sonakshi Sinha,Akshaye Khanna 3 November ’17 Ribbon Kalki Koechlin, Sumeet Vyas,Hitesh Malhan 3 November ’17 Qarib Qarib Single Irrfan Khan, Parvathy,Bajrangbali Singh 10 November ’17 Shaadi Mein Jaroor Aana Rajkummar Rao,Kriti Kharbanda, Govind Namdev 10 November ’17 Tumhari Sulu Vidya Balan, Neha Dhupia,Manav Kaul 17 November ’17 Tera Intezaar Sunny Leone, Gauhar Khan,Arbaaz Khan 24 November ’17 Firangi Kapil Sharma, Ishita Dutta 24 November ’17 Padmavati Deepika Padukone, Ranveer Singh, Shahid Kapoor 1 December ’17 102 not out Amitabh Bachchan,Rishi Kapoor 1 December ’17 Fukrey returns Pulkit Samrat,Manjot Singh,Ali Fazal 8 December ’17 Paramanu John Abraham,Diana Penty, 8 December ’17 Tiger Zinda Hai Salman Khan, katrina Kaif 22 December ’17 Baazaar Saif Ali Khan 22 December ’17 Source: Company, ICICIdirect.com Research

SPH remains robust… The quarter saw a stellar 8.3% YoY growth in SPH to | 91. However, given the higher tax incidence (~18% currently vs. 12% earlier), F&B revenues grew a meagre 1.8% YoY to | 142.3 crore. Going ahead, we expect F&B revenues to grow at 10.2% CAGR (lower than earlier

ICICI Securities Ltd | Retail Equity Research Page 3

estimates as we build in higher tax incidence) in FY17-19E to | 669.1 crore driven by 4% CAGR in SPH over FY17-19 to | 87.5. PVR to have screen portfolio of 697 screens by FY19E The company has always been able to meet its property rollout guidance. As on Q2FY18, PVR has 593 operational screens (including DT Cinema). The company continues to new screen formats in terms of superplexes, drive in cinemas, VR lounges, etc. We expect PVR to meet its screen rollout and factor in 10.4% CAGR in FY17-19E to 697 screens by FY19E. Guides for strong advertisement revenues… The company continued to deliver on the advertisement revenue front, which grew 10.2% YoY to | 67.4 crore. The management has guided for 15-18% growth in ad revenues over the next couple of years. We expect PVR to post 17.8% CAGR over FY17-19E to | 340.0 crore in its advertisement revenues. Margins to reach 18.2% in FY19E … During Q2FY18, input credit on rental expenses led to lower costs during the quarter. We highlight that PVR’s ability to take price hikes, higher advertisement revenues and higher operating leverage will help in margin expansion.

Going ahead, led by robust content and subsequent operating leverage, margins are expected to rebound by FY19E. They are expected at 16.8% and 18.2% in FY18E and FY19E, respectively.

Exhibit 3: EBITDA & PAT margin trend

18.5 18.2 20.0 17.5 16.8 15.7 13.6 15.0

10.0

(%) 6.0 6.5 5.0 4.8 5.5 3.9 1.0 0.0 FY14 FY15E FY16E FY17E FY18E FY19E

EBITDA% NPM%

Source: Company, ICICIdirect.com Research

Exhibit 4: Q2FY18 top 5 contributor to PVR’s ticketing revenues Exhibit 5: Q2FY17 Top 5 contributor to PVR ticketing revenues Q2FY18 Q2FY17 Movie Admits (Lacs) Occupancy(%) ATP (|) GBOC (| cr) NBOC (| cr) Movie Admits (Lacs) Occupancy(%) ATP (|) GBOC (| cr) NBOC (| cr) Toilet ek Prem Katha 17.0 37.0 216.0 37 28 Sultan 34 45 227 76 55 Jab Harry Met Sejal 8.0 24.0 253.0 20 15 Rustom 18 43 220 39 28 Shubh Mangal Saavdhan 9.0 29.0 203.0 18 14 Pink 13 41 192 24 17 Mubarakan 8.0 33.0 202.0 17 13 Dishoom 10 29 196 19 14 Annabelle Creation 8.0 36.0 196.0 16 13 Kabali 9 41 194 18 14

Source: Company, ICICIdirect.com Research Source: Company, ICICIdirect.com Research

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Conference call highlights

 PVR privilege programme: The management has said the objective of the new loyalty programme is stickiness of the consumer as well as some additional revenue from consumption of movies/F&B from the same consumer. PVR does not see any impact of the same on ATP. ATP would continue to grow in the context with inflation

 Launches big screen format P[XL] in quarter: PVR has launched a big screen format screen called ‘P(XL)’ in the quarter in Kolkata. They are planning to launch 11 such screens in the next 18 months. As per the management, ticket pricing for these screens will be at a premium of | 25 to | 50

 Local body tax (LBT) issue in Chennai : The management has said they are actively engaged with the government of Tamil Nadu on the LBT issue in Chennai for resolution. The management would push for zero LBT or similar LBT on non-Tamil films. The management says the LBT issue is so far limited to only Chennai

 bluO sale: It has completed the sale of its stake in its subsidiary PVR- bluO for total consideration of | 86 crore, in line with its strategy to divest non-core assets

 Screen addition guidance: The management has maintained a guidance of 60-70 screen additions in FY18. As per the company, 65% of new screens additions are in south india

 Top five movies contributed 29% to GBOC in Q2FY18 while the occupancy for these movies was 32%. Gross debt was at | 8,204 crore with gross debt/equity at 0.82x

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Valuation PVR remains a key play on the multiplex industry given its leadership and premium positing. However, the stock appears expensive (trading at the higher end of historical EV/EBITDA range of 10-15x) on the valuations front vis-à-vis Inox (trading at 9.7x FY19E EV/EBITDA, 34% discount to PVR), which has better levers for growth as it ramps up its ad revenues. Furthermore, there is uncertainty over the implementation of local body tax, while at the present form, GST is largely a neutral affair. We continue to prefer Inox over PVR. We maintain our HOLD recommendation on PVR and value it at 15x FY19E EV/EBITDA, arriving at a target price of | 1440.

Exhibit 6: Valuations Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE (| cr) (%) (|) (%) (x) (x) (%) (%) FY16 1751.5 18.6 21.0 583.9 67.6 21.4 12.0 16.1 FY17 2043.6 16.7 20.5 0.0 69.3 20.5 10.2 13.7 FY18E 2353.9 15.2 27.4 0.3 51.8 18.5 11.9 15.6 FY19E 2686.8 14.1 37.4 0.4 38.0 14.8 14.0 18.3

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research Page 6

Recommendation History vs. Consensus Estimates

1,700 100.0 1,600 90.0 1,500 1,400 80.0 1,300 70.0 1,200 60.0

(|) 1,100 50.0 1,000 (%) 900 40.0 800 30.0 700 20.0 600 500 10.0 400 0.0 Oct-15 Jan-16 Mar-16 May-16 Aug-16 Oct-16 Jan-17 Mar-17 Jun-17 Aug-17 Oct-17

Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research

Key events Date Event Mar-09 PVR bluO opens its first and India's largest 24 lane Bowling Centre with the brand name of 'blu-O' located at prestigious Ambience Mall in Gurgaon Apr-09 PVR merged with Sunrise Infotainment Pvt. Ltd (the transferor company) a 100% subsidiary of the Company with PVR Ltd (the transferee Company). Jun-09 Tiff between movie producers and exhibitors impacts financials of the business and, hence, stock price Nov-09 PVR Cinemas acquires Dt Cinemas for cash cum stock deal, cash component of | 20.02 crore and allot 2.55 million shares representing 9.1% of PVR's share capital Jan-10 PVRto DT merges Cinemas with Leisure World Pvt Ltd (LWPL) Jan-11 Imax, PVR sign a four theatre deal in India Jun-12 Multiplexes no longer impacted by IPLs. They exhibit better occupancy even during the IPL season Aug-12 PVR sells L Capital Eco equity stake of 10.6% based on its aggressive expansion plans Oct-12 Shift in strategy from production to only distribution owing to heavy losses in the production business Mar-13 Acquires Cinemax for a consideration of about | 203 per share Sep-13 Enters into a sale and lease back agreement for Anupam Cinemas, Delhi Nov-14 Receives board of director's approval for NCD issue of | 500 crore Jun-15 PVR announces acquisition of DT Cinemas owned by DLF and operating 29 screens for a consideration of about | 500 crore

Source: Company, ICICIdirect.com Research

Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S PositionPosition (m) Change (m) (in %) Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 1 Warburg Pincus LLC 18-Jan-17 14.00 6.5 6.5 Promoter 25.3 25.3 20.2 20.3 20.3 2 Bijli (Ajjay) 30-Sep-17 11.25 5.3 0.0 FII 32.6 31.0 38.9 39.7 41.4 3 Kumar (Sanjeev) 30-Sep-17 7.98 3.7 0.0 DII 10.4 12.7 11.6 11.6 9.8 4 Berry Creek Investment Ltd. 30-Sep-17 7.67 3.6 0.0 Others 31.7 31.1 29.4 28.5 28.6 5 Plenty Private Equity Fund I Ltd. 30-Sep-17 7.18 3.4 2.0 6 Gray Birch Investment Ltd. 30-Sep-17 6.33 3.0 0.0 7 Multiples Alternate Asset Management Private Limited 30-Sep-17 5.09 2.4 1.8 8 ICICI Prudential Asset Management Co. Ltd. 30-Sep-17 3.83 1.8 0.2 9 Artisan Partners Limited Partnership 30-Sep-17 2.51 1.2 0.5 10 Baron Capital Management, Inc. 30-Sep-17 2.28 1.1 0.0

Source: Reuters, ICICIdirect.com Research

Recent Activity Buys Sells Investor name Value Shares Investor name Value Shares Plenty Private Equity Fund I Ltd. +36.26M +1.97M BNP Paribas Asset Management Asia Limited -11.90M -0.64M Multiples Alternate Asset Management Private Limited +32.69M +1.77M Fidelity International -2.38M -0.12M Mondrian Investment Partners Ltd. +9.59M +0.52M Gupta (N C) -1.97M -0.09M Artisan Partners Limited Partnership +9.26M +0.50M William Blair Investment Management, LLC -1.73M -0.08M ICICI Prudential Asset Management Co. Ltd. +4.48M +0.24M Kotak Mahindra Asset Management Company Ltd. -1.41M -0.07M

Source: Reuters, ICICIdirect.com Research

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Financial summary

Profit and loss statement | Crore Cash flow statement | Crore (Year-end March) FY16E FY17E FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E Total operating Income 1,881.1 2,162.8 2,353.9 2,686.8 PAT 98.1 95.8 128.0 174.5 Growth (%) 26.8 15.0 8.8 14.1 Add: Depreciation 115.1 138.4 153.0 174.6 Film Distributors Cost 419.8 465.2 546.9 628.4 Add: Interest Paid 84.0 80.6 82.9 83.2 F&B Cost 124.8 140.1 156.7 167.3 (Inc)/dec in Current Assets 250.3 -61.5 -43.7 -44.4 Employee Expenses 185.9 220.5 251.5 276.0 Inc/(dec) in CL and Provisions 93.7 85.1 42.2 75.1 Other Expenses 826.6 980.0 1,003.9 1,125.8 Others 0.0 0.0 0.0 0.0 Total Operating Expenditure 1,557.1 1,805.8 1,959.0 2,197.6 CF from operating activities 641.1 338.3 362.4 463.1 EBITDA 324.0 357.0 394.9 489.2 (Inc)/dec in Investments 0.0 -0.1 0.0 0.0 Growth (%) 66.7 10.2 10.6 23.9 (Inc)/dec in Fixed Assets -267.2 -675.2 -250.0 -325.0 Depreciation 115.1 138.4 153.0 174.6 Others -326.8 34.1 28.5 -0.4 Interest 84.0 80.6 82.9 83.2 CF from investing activities (594.0) (641.2) (221.5) (325.5) Other Income 31.9 18.9 38.6 36.0 Issue/(Buy back) of Equity 5.2 0.1 0.0 0.0 Exceptional Items 11.6 4.1 0.6 0.0 Inc/(dec) in loan funds -95.6 158.3 -50.0 -50.0 PBT 145.3 152.8 197.0 267.4 Dividend paid & dividend tax 0.0 -10.9 -10.9 -10.9 MI/PAT from associates 0.5 0.1 -0.4 0.9 Less: Interest Paid 84.0 80.6 82.9 83.2 Total Tax 46.7 57.0 69.3 92.0 Others 200.9 -162.3 -165.7 -166.4 PAT 98.1 95.8 128.0 174.5 CF from financing activities 194.3 65.7 (143.8) (144.1) Growth (%) 830.5 -2.4 33.7 36.3 Net Cash flow 241.4 -237.2 -3.0 -6.5 EPS (|) 21.0 20.5 27.4 37.4 Opening Cash 25.7 267.1 29.9 26.9

Source: Company, ICICIdirect.com Research Closing Cash 267.1 29.9 26.9 20.4

Source: Company, ICICIdirect.com Research

Balance sheet | Crore Key ratios (Year-end March) FY16 FY17E FY18E FY19E (Year-end March) FY16 FY17E FY18E FY19E Liabilities Per share data (|) Equity Capital 46.7 46.7 46.7 46.7 EPS (Diluted) 21.0 20.5 27.4 37.4 Reserve and Surplus 834.5 918.3 1,035.4 1,198.9 Cash EPS 45.7 50.1 60.2 74.7

Total Shareholders funds 881.2 965.0 1,082.1 1,245.7 BV 188.7 206.5 231.6 266.6 Total Debt 571.8 730.1 680.1 630.1 DPS 0.0 2.3 2.3 2.3 Others 40.1 41.4 41.2 40.8 Cash Per Share 57.2 6.4 5.8 4.4 Total Liabilities 1,493.1 1,736.5 1,803.4 1,916.6 Operating Ratios (%) EBITDA Margin 18.5 17.5 16.8 18.2 Assets EBIT / Net Sales 11.9 10.7 10.3 11.7 Total Fixed Assets 1,070.4 1,607.2 1,704.2 1,854.6 PAT Margin 6.0 4.8 5.5 6.5 Investments 1.9 2.0 2.0 2.0 Inventory days 4.3 3.4 3.1 3.1 Goodwill on Consolidation 5.2 7.1 7.1 7.1 Debtor days 18.8 18.2 18.5 19.0 Debtors 90.1 102.1 119.3 139.9 Creditor days 35.8 35.3 32.0 32.0 Inventory 20.5 19.0 19.7 22.5 Return Ratios (%)

Loans and Advances 15.2 5.3 5.3 5.3 RoE 12.0 10.2 11.9 14.0 Other Current Assets 62.2 123.2 149.0 170.0 RoCE 16.1 13.7 15.6 18.3 Cash 267.1 29.9 26.9 20.4 RoIC 20.8 14.2 14.4 17.1 Total Current Assets 455.1 279.4 320.2 358.1 Valuation Ratios (x) Total Current Liabilities 404.1 489.2 531.3 606.5 P/E 67.6 69.3 51.8 38.0 Net Current Assets 51.1 -209.7 -211.2 -248.4 EV / EBITDA 21.4 20.5 18.5 14.8 Other Non Current Assets 364.7 330.0 301.4 301.4 EV / Net Sales 4.0 3.6 3.1 2.7 Application of Funds 1,493.1 1,736.5 1,803.4 1,916.6 Market Cap / Sales 3.8 3.2 2.8 2.5

Source: Company, ICICIdirect.com Research Price to Book Value 7.5 6.9 6.1 5.3 Solvency Ratios

Debt/EBITDA 1.8 2.0 1.7 1.3 Net Debt / Equity 0.3 0.7 0.6 0.5 Current Ratio 1.0 1.2 1.4 1.4 Quick Ratio 0.9 1.1 1.3 1.3

Source: Company, ICICIdirect.com Research

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ICICI Securities Ltd | Retail Equity Research Page 8 ICICIdirect.com coverage universe (Media) CMP M Cap EPS (|) P/E (x) EV/EBITDA (x) RoCE (%) RoE (%) Sector / Company (|) TP(|) Rating (| Cr) FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E FY17 FY18E FY19E DB Corp (DBCORP) 366 430 Buy 6,731 20.4 23.4 26.6 18.0 15.6 13.7 10.3 10.0 8.5 32.2 32.3 31.7 23.5 23.3 22.6 DISH TV (DISHTV) 78 75 Hold 8,314 1.0 0.5 1.5 76.1 157.5 52.9 9.4 9.3 9.2 20.8 17.4 24.4 22.3 9.8 22.5 ENIL (ENTNET) 800 890 Hold 3,812 11.6 13.1 23.1 69.1 61.0 34.6 30.4 25.3 17.2 9.3 9.5 15.4 6.4 6.4 10.8 HT Media (HTMED) 102 100 Hold 2,385 7.3 10.2 10.0 14.0 10.0 10.2 10.3 9.8 6.7 10.9 12.0 12.2 7.6 9.6 8.7 Inox Leisure (INOX) 228 325 Buy 2,192 3.2 6.3 9.3 71.6 36.0 24.5 17.2 17.2 12.2 7.3 12.1 15.1 5.5 9.9 12.8 Jagran Prakashan 180 210 Buy 5,605 10.6 12.2 14.2 16.9 14.7 12.7 8.4 8.1 7.2 20.1 20.3 21.0 16.1 16.2 17.0 PVR (PVRLIM) 1,420 1,440 Hold 6,637 20.5 27.4 37.4 69.3 51.8 38.0 20.5 20.4 18.3 13.7 15.6 18.3 10.2 11.9 14.0 Sun TV (SUNTV) 840 920 Buy 33,103 26.1 29.3 36.7 32.1 28.7 22.9 18.0 17.8 15.7 37.2 38.2 41.5 25.6 26.1 28.2 TV Today (TVTNET) 358 305 Buy 2,134 18.1 19.2 24.2 19.8 18.6 14.8 11.4 10.8 8.0 24.7 26.6 26.7 16.3 17.4 17.4 ZEE Ent. (ZEEENT) 542 565 Hold 52,025 23.1 16.2 18.2 23.4 33.4 29.7 25.0 24.4 23.0 21.2 22.5 23.3 15.0 14.9 15.4 Source: Company, ICICIdirect.com Research

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RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock.

Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more;

Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

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ANALYST CERTIFICATION We /I, Bhupendra Tiwary MBA, Sameer Pardikar, MBA Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a Sebi registered Research Analyst with Sebi Registration Number – INH000000990. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com.

ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.

ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months.

ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.

ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months.

ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report.

It is confirmed that Bhupendra Tiwary MBA, Sameer Pardikar, MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.

Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report.

It is confirmed that Bhupendra Tiwary MBA, Sameer Pardikar, MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.

Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.

We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

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