UFO Moviez India Ltd - IPO Review By ICICI-Direct

Distribution screen market share of 54%… UFO Moviez India Ltd (UFO) is India’s largest digital cinema distribution network and in-cinema advertising platform with a screen network of about 6611 screens worldwide, including 4,912 screens in India. The distribution arm contributes ~50% to total revenues amounting to | 212.6 crore and has grown at 80% CAGR in FY10-14. UFO also provides digital equipment to exhibitors, which contributes about ~| 97.5 crore or 23% of its revenues. This stream has witnessed 27% CAGR in FY10-14. UFO has an association with ~1669 advertisers & controls the advertisement rights of ~3400 screens. This revenue stream has become nearly 10x from | 9.7 crore in FY10 to | 100 crore in FY14. It remains the key focus area & it intends to grow the yield & ad minutes. UFO has already enjoyed the benefits of strong operating leverage with margins expanding from 2% in FY10 to 31% in FY14. It is likely to grow further with the benefits emanating from an increase in advertising revenues. We remain bullish on the movie exhibition and production space, which is directly linked to Indian consumption growth and recommend SUBSCRIBE for listing gains.

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