PVR-INOX Q3 Review — Weak Quarter Despite An All-Time Blockbuster Release; Motilal Oswal Reiterates 'Neutral'

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Motilal Oswal Report

Despite the release of the all-time blockbuster, Pushpa 2, PVR-INOX Ltd.’s footfall remained stable QoQ at 25.7%, due to weaker performance from the Hindi language movies.

Revenue increased 11% YoY to Rs 17.1 billion (+6% QoQ, 3% beat) driven by alltime high average ticket prices, spends per head, and recovery in advertisement revenue.

Ebitda (pre-Ind-AS 116) improved 17% QoQ to Rs 2.4 billion (5% beat) driven by lower movie exhibition costs. Margin expanded to 13.8% (20bp beat).

FY25 has been a muted year for PVR, due to the lack of tent-pole movie releases in Hindi and the impact of the Hollywood strike.

We expect the content pipeline to improve in FY26, with several tent-pole movie releases in Hindi and an improvement in the Hollywood movie slate.

However, PVR’s business remains highly sensitive to occupancy trends, which are dependent on the quality of content (not in PVR’s control). Although management sounded upbeat about the FY26 content pipeline, we note that even a 200-300 bp blip in occupancy could derail the company’s screen economics.

We cut our FY25-26 revenue estimates by 2-5% and Ebitda by ~10-15% primarily on lower footfall assumptions. Reiterate Neutral with a target price of Rs 1,250 (based on ~14 times pre-Ind-AS 116 FY27E Ebitda).

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