PVR-INOX Q1 Results Review - Bollywood Recovery Under Sight: Prabhudas Lilladher

Prabhudas Lilladher Report

In a subdued quarter, PVR-INOX Ltd.’s performance was broadly in-line with footfalls of 33.9 million (our estimate: 33 million) and pre-Indina Accounting Standard Ebitda margin of 6.2% (our estimate: 5.8%).

After the recent success of 'Barbenheimer' and MI-7, Bollywood has an interesting pipeline with movies like Oh My God-2, Gadar-2, Jawan and Dream Girl-2 lined up for release in next two months.

Even regional pipeline is healthy with movies like Jailor, Bhola Shankar and Salaar gearing up for release in Q2 FY24. Though there are concerns over persistent high volatility in Bollywood genre-

1. sustenance in key performance indicators (average ticket price/spends per head up 2%/10% YoY on proforma basis),

2. expected back ended recovery in ad-revenues (a high margin business) and

3. strategy to penetrate deeper in Southern market (a high footfall geography) is expected to aid growth and margins.

Consequently, we expect footfalls of 154 million/166 million with pre-IND AS Ebitda margin of 16.2%/17.8% for FY24E/FY25E respectively.

Retain ‘Buy’ on the stock with a target price of Rs 1,797 (earlier Rs 1,704) after assigning enterprise value/Ebitda of 14.5 times as we roll-forward to FY25E.

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