PVR Inox Q4 Results Review: Cashflow Improves, But Margin Woes Continue

Bank of America Securities maintained an 'underperform' rating on PVR-Inox Ltd., while cutting its target price to Rs 945 from Rs 990. The price cut reflects weaker-than-expected fourth-quarter performance and an unfavourable risk-reward outlook, despite revenues remaining in line.

In the fourth quarter of financial year 2025, PVR-Inox reported an Ebitda loss of Rs 105 crore, which missed both BofA’s and street expectations. Revenues were broadly on track, supported by 30.5 million admits, an average ticket price of Rs 258, up 11% year-on-year, and a spend per head of Rs 125, down 3% year-on-year.

However, occupancy dipped to 20.5%, down 2 percentage points year-on-year. The Ebitda margin, before impact from Ind-AS adjustments, came in at -0.8%, versus BofA’s estimate of 3.3%.

Net income stood at a loss of Rs 105 crore, wider than BofA’s expected Rs 66 crore loss. Net screen count declined 1% quarter-on-quarter to 1,723, even as the company opened five new screens during the quarter and closed 10. For fiscal 2025, PVR has opened 77 screens and closed 72.

Looking ahead, the company plans to open 100–110 screens in financial year 2026, mostly under the capital-light model. Capex for the year is estimated at Rs 3.5–4.4 billion, slightly higher than fiscal 2025, BofA said in its note. While this model improves cash flows, it does not offer margin advantages due to the structure of revenue-sharing agreements with developers, where PVR does not consolidate the full revenues, it said.

PVR may also spend selectively on capex for renovation of high-value assets and maintenance, the brokerage noted. The firm has signed two new leases in partnership with FOCOL, adding to its asset-light expansion.

On the content front, the rise of direct-to-OTT releases has not yet resulted in a major pullback in theatrical releases. BofA observes that some films like Bholaa Shankar opted for OTT releases at the last minute, but others including Sitaare Zameen Par remain committed to theatrical premieres. No significant screen closures are anticipated in the near term.

While PVR continues to explore a capital-efficient path, margin headwinds and uncertain content pipeline remain key risks. Post the fourth quarter miss, BofA tweaked its earnings estimates and cut the target price, reiterating its cautious stance on the stock.