Docstoc

Cinemax excel

Document Sample
Cinemax excel Powered By Docstoc
					                                                                                                                                                                    April 9, 2008

                                                                                                                                                     Cinemax India Ltd
          Providing financial solutions for all
                                  CMP Rs. 102.00                                                             Target Rs. 162.00                         Initiating Coverage-BUY
          Shareholding Pattern as on 30/12/2006
          Key Share Data                                                                                      Company Profile:
          Face Value (Rs.)                                                              10.00
          Equity Capital (Rs. Mn)                                                      280.00                Cinemax India Ltd (CIL), a leading theatre-chain operator,
          Market. Capitalization (Rs. Mn)                                             2856.00
                                                                                                             promoted by the Kanakia group, which has a track record of
          52-wk High / Low (Rs. )                                                      179/78
          Average Yearly Volume                                                        257527                over 20 years in real estate developments. Cinemax is focused
          BSE code                                                                     532807                on film exhibition and gaming businesses with limited interest
          NSE code                                                                 CINEMAX
          Reuters code                                                              CIMA.BO
                                                                                                             in mall development. It currently operates 18 properties, 52
          Bloomberg code                                                           CNMX IN                   screens and 14030 seats.
                                                                                                             Investment Rationale:
          Shareholding Pattern - 31st December, 2007
                                                 Foreign   Instituions                                       Aggresive expansion plan: By FY10 company is planning to have
                                Public & Other     4%          0%
                                     15%                                     Non Promoter
                                                                                 13%
                                                                                                             over 150 screens with the capacity of around 35000 seats.CIL also
                                                                                                             plans to expand its gaming initiative by opening several more
                                                                                                             Giggles gaming zone across the country.
                                                                                                            Rs Crores
                                                                                                             Enjoying largest share in Mumbai: Mumbai is the hub for Indian
                                                       Promoter
                                                         68%
                                                                                                             cinema and contributes 15% of India’s Box office revenue.
          Financials (Consolidated)
          Financials                                                          (Rs. Million)                  Cinemax is the No. I player in Mumbai with 34 screens, 9295 seats
                            FY07                    FY08E                FY09E      FY10E                    contributing around 33% share.
          Net Sales       1001.57                   1070.00              1998.47   2878.44
          Sales Gr        38.00%                     6.83%               86.77%     44.03%
          EBIDTA           277.31                    320.44               574.13     773.40 Unlocking value in Nagpur Property: CIL has recently
          PAT              119.80                    145.93               262.33     347.35 developed Nagpur property covering an area of around 100,000 sq
          PAT Gr          56.00%                      21.8%              79.76%     32.41% ft. CIL is expecting to generate around Rs. 40-50 million lease
          EPS (Rs.)          4.28                       5.21                9.37      12.41 Rs Crores
          Cash EPS (Rs)      6.11                       7.17               12.48      16.88 rental every year starting from FY09. CIL has valued its property at
                                                                                                             Rs. 80m million hence sale of this property will provide an
          Key Financial Ratios                                                                               additional cash flow.
                           FY07                     FY08E                FY09E         FY10E
          Debt-Equity        0.47                      0.53                 0.71          0.81
          P/E              23.84                      19.57                10.89          8.22               Largest owner of theatre property in India: CIL is one of the
          P/BV               2.09                      1.89                 1.62          1.36               largest owners of theatre properties in India with 8 properties and
          P/Cash EPS       16.69                      14.22                 8.17          6.04
          MCap/Sales         2.85                      2.67                 1.43          0.99               31 screens spread over approximately 16000 sq ft under
          EV/EBIDTA        12.00                      10.60                 6.52          5.55               ownership. This ownership model save the lease rental cost and
          RoNW            8.74%                      9.67%               14.86%        16.49%                also provides the flexibility of remodeling the screen formats with
          RoCE           11.06%                     11.34%               16.02%        16.86%
          OPM (%)        25.45%                     26.68%               27.48%        26.00%                innovative technologies and concepts.
          NPM (%)        11.96%                     13.64%               13.13%        12.07%

           Price comparison b/w BSE SmallCap & CIL
                                                                                                             Wide experience in project execution: CIL's promoter ‘Kanakia
                                                                                                             group’ has been associated with the real state development for
                          200                                                      16000                     more than two decades. The wide experience in real state
                          180                                                      14000                     development enables CIL to identify strategic location and acquire
                chart
          Price160 comparison between SMALLCAP & KRBL Ltd.
                                                  12000
                                                                                                             properties at competitive prices.
                                                                                            BSE Small Cap




                          140
            Share Price




                          120                                                      10000

                          100                                                      8000
                           80                                                      6000                      Recommendation:
                           60
                                                                                   4000
                           40                                                                                At the current level of Rs. 102, CIL is trading at 10.9 x FY09E
                                                                                   2000
                           20                                                                                earnings and 8.2 x FY10E earnings of Rs. 9.4 and Rs. 12.4
                           0                                                       0
                           Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08
                                                                                                             respectively. We recommend a BUY on the stock with a 18
                                                                                                             month target price of Rs. 162, upside potential of 60%.
          Analyst: Kamna Jain
          Tel No.: 022 22819012
          Email: kamna.jain@skpmoneywise.com




SKP Securities Ltd.                                                                               www.skpmoneywise.com                                                  Page 1 of 13
                                                                    SKP Gainz-Cinemax India Ltd.


                      Industry Overview

                     Entertainment & Media Industry:

                     Indian Entertainment and Media Industry continuous to out-perform the Indian
                     Economy and is one of the fastest growing sector in India. As per the 2008 PWC report,
                     the Indian Entertainment and Media Industry is projected to grow at a CAGR of 18%
                     over 2007-12 from an estimated Rs. 513 billion to Rs. 1.2 trillion. Indian E&M sector
                     has been witnessing a strong growth over last few years on the back of booming
                     economy, rising income level with higher disposable income and huge advertisement
                     spending.


                                                     Current size          Expected
                                                        (Rs. Cr)          CAGR(%)      Size by 2012 (Rs.Cr)
                      TV                                  22590                  22                  60000
                      Films                                9600                  13                  17550
                      Print                               14900                  14                  28100
                      Radio                                  620                 24                   1800
                      Music                                  730                  2                     800
                      Animation & Gaming                   1300                  25                   4000
                      OOH                                  1000                  14                   2150
                      Online Advertising                     270                 32                   1100




                                                              Indian E&M Industry 2007-2012
                                                 1%
                                           1% 3%2%                                          Television
                                           2%
                                                3% 1%
                                              1% 2%
                                             1%
                                                                                            Films

                                                                                            Print media
                         24%
                                 29%                                44%                     Radio
                                                                          52%
                                                                                            Music

                                                                                            Animation &
                                                                                            Gaming
                                               19%                                          Out of home
                                     15%
                                                                                            Internet
                                                                                            Advertising

                     Source: FICCI – PWC




SKP Securities Ltd                    www.skpmoneywise.com
                                                                                            Page 2 of 13
                                                                   SKP Gainz-Cinemax India Ltd.


                     Exhibition Industry:

                     The Indian Film Entertainment industry is projected to grow from the present size of
                     Rs. 96 billion to Rs. 176 billion by 2012, implying a 13 percent cumulative annual
                     growth over the next five years. Indian film industry accounts for 20% of total revenue
                     of the Indian Entertainment Industry.

                     Indian film industry is the largest film industry in the world with over 1000 movies
                     produced annually. Advanced and innovative technology is helping the Indian film
                     industry in all the spheres – film production, film exhibition and marketing. Film
                     financing from organized sources is on the rise. Indian film industry is getting benefits
                     due to vertical integration taking place between producers, distributors, exhibitors,
                     broadcasters and music companies. Corporatization and transparency will help to
                     improve the overall profitability of the Indian film industry as well as reduce piracy
                     and leakages which presently accounts for 14% of the Indian film industry’s revenue.



                                                 Music, 2%       Cinem a ads,
                             Satellite/DTH/IP
                                                                     2%
                                 TV, 9%
                                                                            Piracy, 14%
                          DVD/VCD, 4%


                                           Overseas
                                         Theatrical, 12%



                                                        Dom estic
                                                      Theatrical, 57%




                                 Distribution of Film Industry revenue
                          Source: FICCI - PWC




                     Several film production, distribution and exhibition companies are coming out with
                     initiatives to set up more digital cinema halls in the country are already underway.
                     More theatres across the country are getting upgraded to multiplexes. The Indian film
                     exhibition sector had revenue of Rs. 53 billion in 2005 that is expected to grow at a
                     CAGR of 14% for 2005-10 to Rs. 102 billion. With a strong appetite for movies and
                     an upward migration of household incomes in India, this segment brings out several
                     business opportunities. In next year over 600 malls are coming in India. Mall
                     developers are wooing multiplexes to occupy their top floors as anchor tenant which
                     would ensure additional footfalls.




SKP Securities Ltd                www.skpmoneywise.com
                                                                                              Page 3 of 13
                                                                        SKP Gainz-Cinemax India Ltd.


                     India has the largest young population in the world with over 600 million Indians
                     below 30 years of age. The number of screens per million of population is just 14
                     whereas the average in western countries is approximately 40. According to UNESCO
                     study India is a market for 20000 screens today. Total 95% of exhibition comes under
                     unorganized sector hence we foresee a phenomenal growth in Exhibition Industry.


                                      Scre e ns pe r m illion population


                           117


                                    77
                                             61
                                                    53
                                                          52     46
                                                                         45   43
                                                                                     30
                                                                                             14




                                                                m
                                                                  y




                                                                                 K
                              ce




                                                                 n




                                                                                        ia
                               k


                               d


                                                                 y
                               S




                                                              an
                             an
                             ar




                                                               al

                                                               ai
                             U




                                                                                U
                                                              iu




                                                                                       d
                             n

                           m




                                                             p
                                                             It




                                                                                     In
                                                           m


                                                            g
                          ra




                          el




                                                           S




                                                          el
                       en




                                                         er
                        Ir
                        F




                                                        B
                                                        G
                      D



                       Source: Company & SKP Research


                     Further, about 60% of the theatres in the country are situated in the four Indian
                     southern states of Andhra Pradesh, Tamil Nadu, Kerala and Karnatka servicing only
                     22% of the Indian population. As a result of this regional disparity, there is a latent
                     demand to launch theatres in other states of India. Realizing the potential of this
                     demand; several players in the film exhibition business in the country are looking to
                     raise funds from various sources to capture a pie of the potential market.



                                                                       Spre ad of Theatres in India
                                    1%1%1%
                                   1%                                                 Andhra Pradesh
                                 3%                 8%                                Tamil Nadu
                              3%                                                      Kerala
                                                               23%
                              4%
                                                                                      Karnataka
                                                                                      Maharashtra
                                                                                      Uttar Pradesh
                             5%
                                                                                      Gujarat
                                                                 18%                  West Bengal
                                         10%                                          Bihar
                                                                                      Orissa
                                                  10%    11%                          Rajasthan
                                                                                      Assam
                                                                                      Jharkhand
                                                                                      Haryana
                       Source: FICCI - PWC


                     Favorable demographics, rising consumer incomes, retail boom, real estate
                     developments especially with emergence of new shopping malls, availability of better
                     sourcing options both from within India and overseas and changing lifestyles will
                     bring the boost to Indian Film Industry.




SKP Securities Ltd                 www.skpmoneywise.com
                                                                                                  Page 4 of 13
                                                                     SKP Gainz-Cinemax India Ltd.


                      The Company: A snapshot
                     Cinemax India Ltd (CIL)

                     CIL, a leading theatre-chain operator, promoted by the Kanakia group, has a track record
                     of over 20 years in real estate developments. Cinemax is focused on film exhibition and
                     gaming businesses with limited interest in mall development. It currently operates 18
                     properties, 52 screens and 14030 seats. It is also Mumbai’s largest theatre chain with 10
                     properties, 34 screens, 9295 seats that consist of 33% share in Mumbai’s multiplex
                     Industry (15% of the box office revenues comes from Mumbai itself).


                     Exhibition:
                     Company started its business in 1997 with the acquisition of the single screen theatre
                     Samrat in Goregaon, Mumbai. CIL’s primary business consist of setting up, operating
                     and managing a film theatre chain that is a combination of high end multiplexes and
                     budget retrofit single screens. Company also opened ‘Red lounge’ with high comfort
                     recliner seating arrangements and other quality innovative services like massage chairs,
                     swing chairs, karaoke facilities, open terrace cafes etc.


                     Gaming zone:
                     To get advantage from increase in disposable income CIL has forayed into the gaming
                     business, under the brand name, Giggles-The Gaming Zone, at Eternity Mall, Thane.
                     The 13,000 sq-ft area offers around 50 state-of-the-art games. It intends to open seven
                     new gaming zones at its multiplexes by FY 2009.


                     Mall Development:
                     Company has developed over 200,000 sq ft at the Eternity mall, Thane and 100,000 sq ft
                     mall at Nagpur. It intends to construct an additional 300,00 sq ft at the Eternity mall in
                     Thane.


                     Subsidiaries:
                     CIL has three wholly owned subsidiaries- Vista Entertainment Private Ltd, Growel
                     Entertainment Private Ltd, Nikmo Finance Private Ltd is a subsidiary of Growel
                     Entertainment Private Ltd. The Multiplex at Versova, Mumbai is operated under Vista
                     Entertainment Private Ltd. The Multiplex at Kandivali- East, Mumbai is operated under
                     Nikmo Finance Private Ltd. This multiplex is biggest in terms of number of seats.




SKP Securities Ltd                  www.skpmoneywise.com
                                                                                               Page 5 of 13
                                                                          SKP Gainz-Cinemax India Ltd.




                        Existing Properties
                                                             Screens                 Seats             Status
                       Eternity, Thane                                4               1056          Ownership
                       Thane                                          4               1136          Ownership
                       Mira Road                                      3               1018          Ownership
                       Kandivali (East)                               4               1259            Leased
                       Versova                                        6               1575            Leased
                       Sion                                           3                730          Ownership
                       Sion 2                                         2                 97            Leased
                       Vashi                                          3                917            Leased
                       Nasik                                          3               1002          Ownership
                       Himmatnagar                                    3               1146            Leased
                       Panipat                                        3                664            Leased
                       Nashik Regimental                              2                431            Leased
                       Gandhinagar                                    4                843            Leased
                       Guwahati                                       2                500            Leased
                       Ahmedabad- Red carpet                          1                123            Leased
                       Kandivali (West)                               1                287          Ownership
                       Goregaon                                       2                698          Ownership
                       Bandra                                         1                160            Leased
                       Andheri (E)                                    1                362          Ownership
                       Total                                         52              14004
                     Source: Company



                        Revenue Mix (%)


                                                           Gam ing                           2007
                                                           Incom e
                                   Project Incom e
                                                             1%
                                        16%
                     Advertisem ent
                          5%




                           Food Incom e
                               13%                                         Tickets
                                                                           Incom e
                                                                             65%


                              Source: Company




SKP Securities Ltd                              www.skpmoneywise.com
                                                                                                    Page 6 of 13
                                                                                   SKP Gainz-Cinemax India Ltd.


                                        Investment Arguments
                                        Aggressive Expansion Plan: CIL is currently operating in 18 locations with 52
                                        screens and 14030 seats. In FY09 Company intends to enhance capacity to over
                                        25000 seats housed in 100 screens on pan India basis. By FY10 company is planning
                                        to have over 150 screens with the capacity of around 35000 seats. CIL is planning to
                                        have a national footprint spanning all metros and Tier 2 and Tier 3 cities in India.

                                                       160                                           35000     40000


                                                       120                                                     30000
                                                                                          25000
   …enhance capacity to over 35000
                                                                                                       150
 seats housed in 150 screens by 2010                     80                     14030                          20000
                                                                                            100
                                                                        11028
                                                         40     6905                                           10000
                                                                                   52
                                                                         39
                                                                 25
                                                          0                                                    0
                                                                2006    2007     2008E     2009E     2010E
                                                                           Screens                 Seats


                                        CIL is operating its gaming zone under the brand name ‘giggle’. The game parlor is
                                        spread over 13000 sq ft offers around 55 state of the art games in Eternity mall,
                                        Thane. Company plans to expand its gaming initiative by opening several more
                                        Giggles gaming zone across the country. In FY09 company is expecting to generate
                                        over Rs. 30-35 million and in FY10 over Rs. 50-60 million.

                                         Location of Gaming Zone           Area (Sq ft)           Status
                                         Eternity Mall Thane               13000                  Existing
                                         Eternity Mall Nagpur              5000                   Proposed
                                         Red, Carpet, Ahmdabad             4000                   Proposed
                                         Iscon Mega Mall, Rajkot           4000                   Proposed


                                        Enjoying largest share in Mumbai: Mumbai is the hub for Indian cinema and
...Enjoying no. 1 position in Mumbai    contributes 15% of India’s Box office revenue. CIL is the No. 1 player in Mumbai
                among all big players   with 34 screens, 9295 seats contributing around 33% share. With 7 out of 8 owned
                                        properties of CIL are located at prime locations of Mumbai and Thane.

                                         Name                 Screens           Seats                 %Share
                                         Cinemax              34                9295                  33%
                                         Adlabs               30                7999                  32%
                                         Fame                 22                7390                  23%
                                         PVR                  11                3215                  12%




  SKP Securities Ltd                               www.skpmoneywise.com
                                                                                                               Page 7 of 13
                                                                                 SKP Gainz-Cinemax India Ltd.




                                     Taking advantage from Booming Industry: The film entertainment industry grew
                                     14% to Rs.96bn in 2007 and expected to grow to Rs.175bn by 2012. Domestic box
…Domestic box office collection is   office collections grew 12% to Rs71.5bn, accounting for 74% of total revenues and
 expected to reach Rs. 122 bn by     are expected to reach Rs.122.5bn by 2012 on the back of higher ticket prices and
                             2012    higher occupancies. Overseas collections grew 21% during the period to Rs8.5bn,
                                     accounted for 9% of industry revenues and expected to reach Rs.20bn by 2012.

                                     Multiplexes have become complete family outing spots and provide a refreshing
                                     experience to a patron. New streams of revenue like F&B and advertisements have
                                     helped players to expand in spite of high service tax, escalating lease rentals, and
                                     rising set-up cost. Value-added services introduced by CIL like convenient internet
                                     booking facilities, Recliner seats, massage chairs, swing chairs etc boosting its
                                     occupancy level.


                                     Unlocking value in Nagpur Property: As mentioned earlier CIL has recently
                                     developed Nagpur property covering an area of around 100,000 sq ft. CIL is
     …CIL has valued its Nagpur      expecting to generate around 40-50 million lease rental every year starting from
      property at Rs. 800 Miliion    FY09. CIL has valued its property at Rs. 800 million hence sale of this property will
                                     provide an additional cash flow. CIL is also developing Eternity mall phase 2, Thane
                                     with 30,000 sq ft area.


                                     Largest owner of theatre property in India: CIL is one of the largest owners of
                                     theatre properties in India with 8 properties and 31 screens spread over approximately
      … Cinemax owns around 8        16000 sq ft under ownership. This ownership model save the lease rental cost and
      properties with 31 screens     also provides the flexibility of remodeling the screen formats with innovative
                                     technologies and concepts.


                                     Wide experience in project execution: Company’s promoter ‘Kanakia group’ has
                                     been associated with the real state development for more than two decades. The
                                     group has developed over 5 million square feet of residential and commercial
                                     properties. Thus wide experience in real state development enables CIL to identify
                                     strategic location and acquire properties at competitive prices that helps company to
                                     control cost and time overrun in developing projects.




  SKP Securities Ltd                            www.skpmoneywise.com                                       Page 8 of 13
                                                                  SKP Gainz-Cinemax India Ltd.



                      Key Concerns
                     Piracy and poor quality content: Availability of cheaper alternatives of movies like
                     pirated VCD, DVD is capable to influence the decision of patrons to visit multiplexes
                     and theatres.

                     Withdrawal of any tax exemption: A crucial decision of company for the
                     expansion plans are availability of incentives such as Entertainment tax exemptions
                     at its various location. In future if the state government decide to remove such
                     entertainment taxes in territories where multiplexes are in operation or going to
                     operate, This could have a material adverse impact on CIL’s profitability.

                     Delay in execution: To start a multiplex, exhibition companies are much more
                     depended on handover of property by Mall developer. Delay by mall developer can
                     also extend the execution which will have direct impact on company’s top line.

                     Leased Properties: Going forward company is planning to operate all properties on
                     lease basis. Hence Lease rental and service tax imposed hereon will become an
                     incremental cost and will impact profitability.


                      Peers
                     I    t         t R ti         l
                                                              Properties       Screens             Seats
                      PVR                                            24             95            24450
                      Inox                                           22             76            23199
                      Adlabs                                         45            131            45238
                      Cinemax                                        18             52            14030
                      Fame (Shringar)                                13             44            14210

                                                                   EBITDA
                                                   Revenue        Margin(%)             PAT         EPS
                      PVR                           1667.20            19.70           101.90       3.95
                      Inox                          1530.10            29.70           247.90       4.17
                      Adlabs                        3554.20            37.10           911.60      22.74
                      Cinemax                       1001.60            27.00           114.80       5.21
                      Fame (Shringar)                878.10            26.40           232.00       3.09

                      60.0
                      50.0                                          49.2
                      40.0
                      30.0                                          28.3
                                      19.3             19.8                    19.6
                      20.0
                                                       16.0                                     17.1
                                      13.1                                                      12.9
                      10.0                                                      10.9
                        0.0
                                  PVR           Inox        Adlabs    Cinemax            Fame
                                                       PE08E       PE09E




SKP Securities Ltd              www.skpmoneywise.com
                                                                                           Page 9 of 13
                                                                                                                   SKP Gainz-Cinemax India Ltd.



                                            Financial Outlook
                                            Top-line is estimated to grow at a CAGR of 42% over FY07-10

                                            For FY07, Net sales have gone up to Rs1001.57 mn registering a growth of 38% y-on-
                                            y basis. We expect CIL’s consolidated revenue to grow at a CAGR of 42% over
                                            FY07-10 on the back of huge expansion plan. We have taken an average ticket price
                                            of Rs. 159 and F&B spend per patron at around Rs. 29 and occupancy rate at around
                                            32%. Theatrical exhibition will remain the main revenue contributing segment while a
                                            small part of revenue can be expected from gaming and mall development business.


                                                                  3000.0                                                                 2878.4

                                                                  2500.0
                                                                                                                        1998.5
                                                                  2000.0
                                                    R in Crs




                                                                  1500.0             1001.6             1070.0                                      44%
                                                                                                                                   87%
                                                     s.




                                                                  1000.0                                           7%
                                                                                                 38%
                                                                    500.0

                                                                            0.0
                                                                                         FY07           FY08E            FY09E            FY10E

                                                                                          Net Sales                % Growth
                                                               Source: Company & SKP Research



                                            EBITDA and PAT to grow at a CAGR of 41% and 43% respectively, over
                                            FY2007-10E
                                            CIL has witnessed an EBITDA margin of 27.7% and Net profit margin of 12% in
                                            FY07. Going forward company is expanding its Exhibition business through leased
                                            based properties; hence lease rental cost will continue to keep margin under pressure.
                                            We expect the company to maintain the EBIDTA Margins between 26-30% in the
                                            next three years. PAT margin will remain in the range of 12-13% for next 3 years. CIL
                                            is expecting to enhance its gaming and food court division. a high margin business.



                                                                                                500.0                                                           15.0
   1000.0                        29.9                                             30.0
                                                                                                400.0                          13.6                             14.0
    800.0                                                                         29.0
                                               28.7
                                                                                                300.0                                        13.1               13.0
    600.0                                                        7 7 3 .4         28.0
                   27.7                                                                                                                             3 4 7 .3
                                         5 7 4 .1                                                                                     2 6 2 .3             12.1 12.0
    400.0                                                               26.9 27.0               200.0          12.0

                          3 2 0 .4                                                              100.0                    14 5 .9                                11.0
    200.0   2 7 7 .3                                                              26.0                    119 .8

      0.0                                                                         25.0            0.0                                                           10.0
             FY07         FY08E         FY09E                   FY10E                                     FY07          FY08E         FY09E         FY10E

                       EBITDA           EBITDA Margin(%)                                                              Net Profit      PAT Margin (%)




SKP Securities Ltd                                                      www.skpmoneywise.com                                                        Page 10 of 13
                                                                                        SKP Gainz-Cinemax India Ltd.
                      Income Statement (in Rs. Million)
                      Year End March                                FY07      FY08E              FY09E         FY10E
                      Net Sales                                   1001.57    1070.00            1998.47       2878.44
                      Theatre Division                             832.26    1050.00            1924.47       2773.44
                      Property Development Division                158.35        0.00             40.00         50.00
                      Gaming Division                               10.96      20.00              34.00         55.00
                      Growth in Sales (%)                         38.00%      6.83%             86.77%        44.03%
                      Other Income                                  22.41      35.00              25.00         25.00
                      Total                                       1023.98    1105.00            2023.47       2903.44

                      Operating Expenses                           522.51     538.46            1019.66        1516.93
                      Employee Expenses                             62.10      74.90             129.90         187.10
                      Selling & Administration Expenses            162.06     171.20             299.77         426.01

                      Total Expenditure                            746.67     784.56            1449.34        2130.04

                      Operating Profit                            254.91     285.44             549.13         748.40
                       OPM (%)                                    25.45%     26.68%             27.48%         26.00%
                       EBIDTA                                     277.31     320.44             574.13         773.40
                      Interest                                      49.24      43.96              91.71         129.56
                      Depreciation                                  55.15      58.66              90.89         125.41
                      PBT                                         172.92     217.81             391.54         518.43
                      Income Tax                                    53.12      71.88             129.21         171.08
                      PAT                                         119.80     145.93             262.33         347.35
                      Growth in PAT (%)                            56.0%      21.8%              79.8%          32.4%

                      Eq. Capital (Rs. Million)                    280.00     280.00             280.00         280.00
                      EPS (Rs.)                                      4.28       5.21               9.37          12.41
                      Cash EPS (Rs.)                                 6.11       7.17              12.48          16.88
                      Dividend per Share (Rs.)                       0.22       0.20               0.20           0.20


                      Balance Sheet (in Rs. Million)
                               Balance Sheet (in Crores)
                      Year End March                                FY07     FY08E              FY09E         FY10E
                      Equity Share capital                         280.00     280.00             280.00        280.00
                      Preference share Capital                       1.70       1.70               1.70          1.70
                      Reserves & Surplus                          1088.33    1227.81            1483.69       1824.59
                      Shareholder's Fund                          1370.04    1509.52            1765.39       2106.29
                      Secured Loan                                 628.81     789.77            1242.07       1706.47
                      Unsecured Loan                                10.01       9.57               8.50          8.25
                      Total Liabilities                           2008.86    2308.86            3015.97       3821.01

                      Gross Block                                  854.76    1518.01            2512.97       3592.27
                      Depreciation                                 138.73     193.57             280.64        406.05
                      Net Block                                    716.03    1324.44            2232.33       3186.22
                      Capital Work-in-Progress                     512.68     550.76             645.10        670.80
                      Goodwill                                      19.49      15.68              11.86          8.04
                      Investments                                  648.46     300.00               0.00          0.00
                      Current Assets
                      Inventories                                   10.44      13.17              24.14          34.78
                      Debtors                                       79.49      84.93             134.82         174.77
                      Cash & Bank Balance                          167.58     259.83             360.91         278.02
                      Loans & Advances                             161.13     172.14             321.51         463.08
                      Total Current Asset                          418.64     530.07             841.38         950.66
                      Current Liabilities & Provisions
                      Current Liabilities                          233.45     294.53             539.81         777.95
                      Provisions                                    33.70      78.26             135.59         177.46
                      Total Current Liabilities                    267.15     372.79             675.41         955.42

                      Net Current Assets                           151.50     157.28             165.97          -4.76
                      Misc. Exp not written off                       0.29       0.29               0.29          0.29
                      Net Deferred Tax Asset                        -39.59     -39.59             -39.59        -39.59
                      Total Assets                                2008.86    2308.86            3015.97       3821.01




SKP Securities Ltd.                               www.skpmoneywise.com                                         Page 11 of 13
                                                                               SKP Gainz-Cinemax India Ltd.
                      Cash Flow Statement
                      Year End March                         FY07    FY08E             FY09E          FY10E

                      Cash Flow from operations
                      EBITDA                                182.23   320.44             574.13        773.40
                      Change in Working Capital
                      Change in Receivables                 187.02   -16.44            -199.27        -181.52
                      Change in inventory                   159.48    -2.73             -10.97         -10.65
                      Change in Payables                   -151.16   105.64             302.62         280.01
                      Direct taxes paid                     -42.32   -71.88            -129.21        -171.08
                      Others                                 -6.60     0.00               0.00           0.00
                      Total Change                          146.42    14.59             -36.83         -83.24
                      Cash Flow from Operations             328.66   335.03             537.31         690.16
                      Cash Flow from Investing
                      Change in Fixed Assets               -565.66   -701.33          -1089.30       -1105.00
                      Change in Investments                -638.43    348.46            300.00           0.00
                      Dividend Received                       0.00      0.00              0.00           0.00
                      Interest Received                      13.39      0.00              0.00           0.00
                      Inter Corporate Deposit                 0.00      0.00              0.00           0.00
                      Total                               -1190.70   -352.87           -789.30       -1105.00
                      Cash Flow from Financing
                      Change in Equity                     1022.33     0.00               0.00           0.00
                      Change in Debts                        16.73   160.52             451.23         464.15
                      Dividend paid                           0.00    -6.45              -6.45          -6.45
                      Interest paid                         -39.10   -43.96             -91.71        -125.75
                      Others                                  0.00     0.00               0.00           0.00
                      Total                                 999.96   110.10             353.07         331.95

                      Opening Cash                           27.27   167.58             259.83        360.91
                      Cash Flow during the year             137.91    92.26             101.07        -82.89
                      Closing Cash                          165.19   259.83             360.91        278.02


                      Ratio Analysis
                      Year End March                         FY07    FY08E             FY09E          FY10E

                      Valuation Ratios
                      Price Earning (P/E)                    23.84    19.57              10.89           8.22
                      Price / Book Value                      2.09     1.89               1.62           1.36
                      Price / Cash EPS                       16.69    14.22               8.17           6.04
                      EV / EBIDTA                            12.00    10.60               6.52           5.55
                      Market Cap / Sales                      2.85     2.67               1.43           0.99

                      Earning Ratios
                      OPM (%)                              25.45%    26.68%            27.48%         26.00%
                      NPM (%)                              11.96%    13.64%            13.13%         12.07%
                      CPM (%)                               0.00%     0.00%             0.00%          0.00%
                      RoNW (%)                              8.74%     9.67%            14.86%         16.49%
                      RoCE (%)                             11.06%    11.34%            16.02%         16.86%


                      Balance Sheet Ratios
                      Debt-Equity                             0.47      0.53              0.71           0.81
                      Current Ratio                           1.57      1.42              1.25           1.00
                      Debtors Days                              21        28                20             19
                      Creditors Days                           102        89                75             82
                      Inventory Days                            32         4                 3              4
                      Interest Coverage Ratio                 4.51      5.95              5.27           5.12


                      Turnover Ratios
                      Fixed Asset                             1.17     0.70               0.80          0.80
                      Inventory                              11.12    90.65             107.14         97.70
                      Debtor                                 17.07    13.02              18.19         18.59




SKP Securities Ltd.                         www.skpmoneywise.com                                    Page 12 of 13
                                                                                                                                                                                                  SKP Gainz-Cinemax India Ltd.

                                                                                                                             SKP Coverage

             ABG Shipyard Ltd                                                                                 HEG Ltd.                                                                         Mangalam Cement Ltd.
             Action Construction Equipments Ltd.                                                              HBL Power Systems Ltd.                                                           Nava Bharat Ventures Ltd.
             Ahmednagar Forgings Ltd.                                                                         Hindustan Sanitaryware Ltd.                                                      Omax Autos Ltd.
             Apar Industries Ltd.                                                                             Hyderabad Industries Ltd.                                                        Orient Paper & Industries Ltd.
             Balrampur Chini Mills Ltd.                                                                       Indo Tech Transformers Ltd.                                                      Philips Carbon Black Ltd.
             Bartronics India Ltd.                                                                            IMP Powers Ltd.                                                                  Polyplex Corporation Ltd
             Bharti Shipyard Ltd.                                                                             IFGL Refractories India Ltd.                                                     Ramasarup Inds. Ltd.
             Binani Cement Ltd.                                                                               Jindal Poly Films Ltd.                                                           RSWM Ltd.
             Cera Sanitaryware Ltd.                                                                           Jyoti Structure Ltd.                                                             Savita Chemicals Ltd
             Finolex Cables Ltd.                                                                              Kalindee Rail Nirman (Engineers) Ltd.                                            Simplex Projects Ltd
             Gateway Distriparks Ltd.                                                                         KEI Industries Ltd.                                                              Sona Koyo Steering Systems Ltd.
             Gayatri Projects Ltd.                                                                            Kesoram Industries Ltd.                                                          Subros Ltd.
             GEI Hamon Industries Ltd.                                                                        Kernex Microsystems India Ltd.                                                   Tractors India Ltd.
             Genus Power Infrastructures Ltd.                                                                 KRBL Ltd.                                                                        Tantia Constructions Ltd.
             Global Vectra Helicorp Ltd.                                                                      Llyod Electric & Engineering Ltd.                                                Uttam Galva Ltd.
             Graphite India Ltd.                                                                              La Opala RG Ltd.                                                                 Visaka Industries Ltd.
             Gujarat Ambuja Exports Ltd.                                                                      Manugraph India Ltd.
             Hanung Toys & Textiles Ltd.                                                                      Mcnally Bharat Engg. Co. Ltd.




             The above analysis and data are based on last available prices and not official closing rates.
             DISCLAIMER: This document is for private circulation only. Neither the information nor any opinion expressed constitutes an offer, or any invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to
             such securities ("related investments"). SKP Securities Ltd. or any of its associates or employees does not accept any liability whatsoever direct or indirect that may arise from the use of the information herein. SKP Securities Ltd. and its affiliates
             may trade for their own accounts as market maker, block positioner, specialist and/ or arbitrageur in any securities of this issuer(s) or in related investments, and may be on the opposite side of public orders. SKP Securities Ltd., its affiliates,
             directors, officers, employees and employee benefit programs may have a long or short position in any securities of this issuer(s) or in related investments. No matter contained herein may be reproduced without prior consent of SKP . While this
             report has been prepared on the basis of published/ other publicly available information considered reliable, we are unable to accept any liability for the accuracy and completeness of its contents.


             SKP Securities Ltd. (Member of NSE & BSE)
             Analyst: Kamna Jain Tel: 022 22819012                                                                                                                                                                       Kolkata Office (Head Office)
             E-Mail : kamna.jain@skpmoneywise.com                                                                                                                                                                               Tel. (033) 40077000
             Institutional Sales (Mumbai)                                                                                                                                                                                       Fax: (033) 40077007
             Tel. (022) 22811015; Fax 22830932                                                                                                                                                               E-Mail : research@skpmoneywise.com
             E-Mail : dealingdesk@skpmoneywise.com
                       skp.sec@bloomberg.net
                                                                                           SKP Research is also available on Thomson First Call & Investext




SKP Securities Ltd.                                                                                           www.skpmoneywise.com                                                                                                                      Page 13 of 13

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:34
posted:5/1/2010
language:English
pages:13