PVR-Inox Q4 Results Review: Long Term Story Remains Intact, Says IDBI Capital Maintaining 'Buy'

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IDBI Capital Report

PVR-Inox Ltd. reported a tepid performance, primarily marred by a lack of compelling content, leading to muted footfalls at 30.5 million (-6.3% YoY) and occupancy of 20.5% (-10% YoY). FY25 witnessed a slump in box office collections, with Bollywood and Hollywood revenues plunging 26% /28% respectively which led to a 9% decline in overall gross box office collection.

This was mainly due to a material drop of ~14% in Hindi film releases and residual impact related to the prior year’s industry strike. Post-Covid, cinema exhibitors experienced a structural headwind mainly due to expansion of OTT platforms, content fatigue, and Hollywood labour disruptions.

Nevertheless, PVR is proactively navigating these headwinds through strategic deleveraging through adoption of asset-light and FOCO models, coupled with Hollywood releases (sequels), Big-star movies etc. While near-term challenges persist, the company’s long-term outlook remains structurally intact.

We retain our Buy rating with a revised target price of Rs 1,122 (vs Rs 1,300) due to recent correction in stock prices, valuing at 11.7x FY27E EV/Ebitda.

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