Anand Rathi bullish on Pyramid Saimira Theatres

Pyramid Saimira Theatres (PSTL) operates in all categories – Film exhibition – multiplexes, cineplexes and single screens; Film distribution and also in content production for TV / films. Headquartered in Chennai, it commands 44 multiplexes with 113 screens, and 590 single screens. It has now expanded its (film exhibition) business to Malaysia, China and the US. Its film exhibition model is asset-light (all the theatres are rented not owned). PSTL has recently ventured into film production and TV production by launching a subsidiary, Pyramid Saimira Productions Limited (PSPL). PSTL uses an end-to-end Digital Cinema Solution in few of its theatres, and this is set to revolutionize the distribution and exhibition system in the Indian film industry.

Pyramid Saimira Productions Ltd., (PSPL), its subsidiary would also release about 30 films in the four South Indian States in FY09.

For the year ending Mar-09, the company is expected to do earnings of Rs 23.8 per share [on expanded capital]. At current price of Rs 315, it is available at fairly attractive valuations of 13 times FY-09 earnings. One can buy the stock with stop loss of Rs 250 and look for targets of Rs 380 in short to medium term and Rs 430 in
long term.

Kindly note that we have started including Anand Rathi in our coverage from April-1st due to exodus of large number of Research analysts from Citigroup to AnandRathi including former Citi head, Ratnesh Kumar.