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EMKAY - Cinemax India Limited
Friday, April 13, 2007
Cinemax India (CIL) is a part of the Mumbai based Kanakia Group, which has developed over five million square feet of residential and commercial real estate. CIL is focused on the exhibition and gaming business with limited interest in mall development. The Company is also one of the
largest owner of multiplex properties in India, with 33 screens spread over 155,000 square feet area. CIL also operates Giggles-The Gaming Zone, at Eternity mall in Thane. It is spread over 13,000 square feet and offers 50 games. CIL has also developed over 200,000 square feet of mall area at Eternity mall, with tenants, including Globus, Proline, Planet M and Archies Gallery.
CIL exhibition chain is a combination of high-end multiplexes and budget retrofit single-screens. CIL having established itself in Mumbai, Thane and Nashik with over 12000 seats housed in 33 screens across 10 properties now plans to expand its operations on a pan India basis across 42 locations in 11 states by the end of FY 2009E.
CIL stock trades at EV/EBITDA 7x FY08E and 5x, FY09E. On a relative valuation basis, CIL trades at 13.5x FY08E and 9x FY09E, which is at a discount of around 58% to PVR and 21% to Inox Leisure based on FY08E.
We initiate a BUY on the stock with a price target of Rs 193 based on the DCF approach, at our target price the stock will be valued at 8x EV/EBITDA FY09E.
Investment Highlights –
Indian Media and Entertainment Sector: - Future Looks Bright
Indian Media and Entertainment sector, is all set to witness strong growth in the coming years, according to recent FICCI –PWC report Indian Media and Entertainment industry is well poised to grow at a CAGR of 18% to reach Rs 1trillion by 2011, from current size of Rs 437 billion. Incidentally, Indian M&E sector is forecasted to outperform the economic growth in each year till 2011.
On the other hand, Indian Film industry, is mirroring the growth in the Indian M&A sector, from its current size of Rs 85 billion, will be aided by the advancement of technologies like digital cinema halls to reach Rs 175 billion by 2011 with a CAGR of 16%. In addition to this, though Bollywood may account for only 2% of the worldwide box office currently, it is expected to more than double its share of the global market in the years to come, which give impetus to drive demand for multiplexes in the coming years.
Indian Multiplex Industry: On an upswing
With robust growth expected in Indian Media and Entertainment sector, Indian Multiplex sector is in a sweet spot to depict strong growth in the coming years, the main catalysts, which will help to drive this growth are: Increasing disposable
income coupled with changes in the demographic and lifestyle, with urban population expected to increase from 107 mn in 2001 to 138 mn by 2011, will favor the demand for multiplex. Secondly, increasing corporatisation in the Indian film industry and increasing number of high grade films should increase for total demand for movies, which inherently drive the demand for multiplexes. Thirdly, increase in the disposable incomes of Indian middle class population also would drive the appetite to spend on movies, which is clearly being seen in Tier II and smaller towns, since currently, as much as 65% of the total box office collections in the country come from non metros.
Download full report Here
largest owner of multiplex properties in India, with 33 screens spread over 155,000 square feet area. CIL also operates Giggles-The Gaming Zone, at Eternity mall in Thane. It is spread over 13,000 square feet and offers 50 games. CIL has also developed over 200,000 square feet of mall area at Eternity mall, with tenants, including Globus, Proline, Planet M and Archies Gallery.
CIL exhibition chain is a combination of high-end multiplexes and budget retrofit single-screens. CIL having established itself in Mumbai, Thane and Nashik with over 12000 seats housed in 33 screens across 10 properties now plans to expand its operations on a pan India basis across 42 locations in 11 states by the end of FY 2009E.
CIL stock trades at EV/EBITDA 7x FY08E and 5x, FY09E. On a relative valuation basis, CIL trades at 13.5x FY08E and 9x FY09E, which is at a discount of around 58% to PVR and 21% to Inox Leisure based on FY08E.
We initiate a BUY on the stock with a price target of Rs 193 based on the DCF approach, at our target price the stock will be valued at 8x EV/EBITDA FY09E.
Investment Highlights –
Indian Media and Entertainment Sector: - Future Looks Bright
Indian Media and Entertainment sector, is all set to witness strong growth in the coming years, according to recent FICCI –PWC report Indian Media and Entertainment industry is well poised to grow at a CAGR of 18% to reach Rs 1trillion by 2011, from current size of Rs 437 billion. Incidentally, Indian M&E sector is forecasted to outperform the economic growth in each year till 2011.
On the other hand, Indian Film industry, is mirroring the growth in the Indian M&A sector, from its current size of Rs 85 billion, will be aided by the advancement of technologies like digital cinema halls to reach Rs 175 billion by 2011 with a CAGR of 16%. In addition to this, though Bollywood may account for only 2% of the worldwide box office currently, it is expected to more than double its share of the global market in the years to come, which give impetus to drive demand for multiplexes in the coming years.
Indian Multiplex Industry: On an upswing
With robust growth expected in Indian Media and Entertainment sector, Indian Multiplex sector is in a sweet spot to depict strong growth in the coming years, the main catalysts, which will help to drive this growth are: Increasing disposable
income coupled with changes in the demographic and lifestyle, with urban population expected to increase from 107 mn in 2001 to 138 mn by 2011, will favor the demand for multiplex. Secondly, increasing corporatisation in the Indian film industry and increasing number of high grade films should increase for total demand for movies, which inherently drive the demand for multiplexes. Thirdly, increase in the disposable incomes of Indian middle class population also would drive the appetite to spend on movies, which is clearly being seen in Tier II and smaller towns, since currently, as much as 65% of the total box office collections in the country come from non metros.
Download full report Here
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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
