Shree Ashtavinayak Cine Vision Ltd. “Buy”

CMP : Rs 386 Target : Rs 557

Shree Ashtavinayak Cine Vision Ltd (SACVL) is leading player in film production and distribution business and has produced seven films so far, out of which its last five films have proved to be quite successful at box-office. SACVL is one of the rare production houses having delivered continuous successful films. In distribution business, SACVL is a market leader in Mumbai territory and its expertise in good selection of films enables a high success ratio. SACVL has aggressive plans for scaling up its production as well as distribution business. It has lined up 13 films to be released in next two years and has signed up reputed directors with top star casts. Under its distribution business, SACVL plans to expand its geographical presence by entering into Delhi/UP, Punjab territory and also planning to enter into overseas distribution. To meet its funding requirements of production as well as distribution, SACVL has recently raised $34.25mn through FCCB. We expect Total Revenue & PAT to grow at a CAGR of 113.4% and 83% over FY08-10. We initiate coverage with a “BUY” recommendation and price target of Rs 557, an upside of 44.3%, based on 14x FY10E EPS of Rs 39.8.

NW