Buy PVR INOX; target of Rs 1650: Emkay

Emkay's research report on PVR INOX

PVR Inox’s results reflect the subpar box-office collections during the quarter due to a weak slate of movie-lineup, given the general elections happening over an extended period, and the IPL and T20 World Cup held during Q1. Footfalls fell further to 30.4mn, down 6.7% QoQ, whereas ATP inched up marginally to Rs235 from Rs233 in Q4 albeit still impacted by the lack of big-budget releases and higher promotional offers. Occupancy was weak at 20.6%. Select small-tomid- budget movies did see some traction, though not enough to move the needle. The management is taking steps to drive higher revenue and to optimize costs, but these are likely to fructify only in the medium term. The near-term movie pipeline has improved which should result in some pick-up in collections going ahead.

Outlook

We cut FY25E/26E EBITDA by 9%/2%, to factor in the Q1 performance; also, we introduce FY27 estimates. We maintain BUY on the stock, with unchanged TP of Rs1,650/sh (roll-over to Jun-26E pre-IndAS EBITDA).