Buy PVR Inox; target of Rs 1860: ICICI Securities

ICICI Securities's research report on PVR Inox

PVR Inox’s ad revenue grew ~36% QoQ to ~INR 1.48bn (highest quarterly ad-income post Covid) in Q3FY25, which in our view is an encouraging development. However, sustainability of ad revenue is contingent on recovery of content pipeline. While Hollywood pipeline looks better in CY25 compared to what we saw over the last 2 years, there is still limited visibility of Hindi content. Also, asset monetisation plan, which could have materially improved EBITDA to PAT conversion, is unlikely to materialise in near term. Therefore,

Outlook

We have cut PAT by 38.3%/21.0% for FY26/27E and TP to INR 1,860 (17.3%). We believe the stock is presently undervalued and steps taken by the management such as moving towards a more capital-efficient model may re-rate the stock in medium term. Maintain BUY.