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Nirmal Bang Report
After a very poor Q2 FY23 by both PVR Ltd. and Inox Leisure Ltd., we believe that Q3 FY23 will be a good quarter (but not an outstanding one like Q1 FY23) due to positive consumer response to content like ‘Drishyam-2', ‘Kantara', ‘Avatar: The way of water', ‘PS-1' etc. Movies like ‘Vikram Vedha', ‘Black Panther – Wakanda Forever' delivered below expectation box office collections, but were not outright disasters.
We believe that occupancy levels were at ~80-85% of Q3 FY20 levels.
Overall Q3 FY23 revenue is likely to be 1-4% higher versus the pre-pandemic level seen in Q3 FY20 . This will be largely driven by higher than pre-pandemic average ticket price and spends per head.
Ebitda (pre-Ind AS 116) will be 7-13% lower as the highest margin segment of advertising revenue will be only 60-65% of 3QFY20 level.
We currently expect recovery in ad revenue to pre-pandemic levels only by H2 FY24. We expect both companies to report a net profit for Q3 FY23 after having reported a net loss in Q2 FY23.
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