- Motilal Oswal sees positive prospects for PVR-INOX due to content and premium screens
- PVR-INOX has controlled operating costs and reduced debt effectively
- Occupancy rates impact PVR-INOX's earnings and are content-dependent
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Motilal Oswal Report
According to Motilal Oswal, a recovery in Hollywood collections and a promising content slate across languages bode well for PVR-INOX Ltd., given its skew toward premium screening formats.
PVR-INOX has done a commendable job in reigning in operating and optimising capital costs, while also deleveraging the balance sheet. However, its business remains highly sensitive to occupancy, which is dependent on the quality and consistency of content, a factor largely outside the company's control.
While management remains optimistic about the CY26 content pipeline, even a 200-300 basis points decline in occupancy could materially impact screen-level economics and Ebitda performance, posing downside risks to brokerage's current estimates.
Motilal Oswal's FY27-28E Ebitda remains broadly unchanged, while PAT estimates rise sharply, driven by lower interest expenses.
The brokerage has built in a FY26-28E revenue/Ebitda compound annual growth rate of 9-10% for PVR-INOX.
Motilal Oswal reiterate its Neutral rating with a revised target price of Rs 1,125 (earlier Rs 1,080) premised on 10x pre-Ind-AS 116 FY28E Ebitda.
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