PVR Limited - Rating outlook revised to 'Stable', Ratings Reaffirmed

CRISIL Ratings has revised its outlook on the long-term bank facilities and debt programmes of PVR Ltd (PVR) to 'Stable' from 'Negative' and has reaffirmed the ratings at 'CRISIL A+/CRISIL PPMLD A+ r'. The ratings on the Rs 50 crore longterm principal-protected market-linked debentures (see the Annexure - Detail of Rating withdrawn table) have been withdrawn as the same have been repaid. The withdrawal is in line with CRISIL Ratings' withdrawal policy.

The revision in outlook reflects strong rebound in the operating performance of PVR during the third quarter of fiscal 2022. While the third wave of the Covid-19 pandemic did marginally impact operations in January 2022, recovery began from February onwards. Besides improvement in occupancy, average ticket prices (ATP) and spend per head (SPH) on food & beverages have sustained at levels higher that those prior to the pandemic. Moreover, movies released since last week of February reported strong performance at the box office. Business should continue to boost in the coming quarters, supported by uplifting of pandemic-related restrictions and strong content line up ready to be released over the next few months. The operating margin may also benefit from some of the cost-control measures undertaken over the last two years, which are expected to sustain longer.

The company's liquidity benefitted significantly from the various equity raises undertaken over the past two years. Cash and bank balance, undrawn committed bank lines and other liquid investments stood at above Rs 740 crore as on December 31, 2021, which should sufficiently cover debt obligation and capital expenditure (capex) in fiscal 2023.

Sustained improvement in revenue and operating margin, along with maintenance of healthy liquidity, will remain key monitorables.

The ratings continue to consider strong market position and established brand of PVR, improving operating efficiency, and healthy financial risk profile and liquidity. These strengths are partially offset by exposure to risks inherent in the film exhibition business.

Shares of PVR Limited was last trading in BSE at Rs. 1777.10 as compared to the previous close of Rs. 1757.05. The total number of shares traded during the day was 29946 in over 2370 trades.

The stock hit an intraday high of Rs. 1782.55 and intraday low of 1750.75. The net turnover during the day was Rs. 53051462.00.

Source : Equity Bulls

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