ICICI Securities's research report on PVR Inox
PVR Inox is undertaking a slew of new initiatives such as: 1) Tying up with Devyani International to launch branded food courts near its properties, 2) trying franchisee owned company operated (FOCO) model to reduce capex requirements, 3) experimenting with ‘no-ads’ in premium screens and 4) monetising real estate assets to reduce debt. Given the muted Hindi content pipeline in the near term, the company is going slow on screen additions. Management guided for 25% lower capex in FY25 vs FY24. Given the slower screen addition and sustained weakness in content, we cut our adj. EBITDA estimates by 12%/11.5% for FY25/26E.
Outlook
We maintain our target multiple of 16x (1-year forward) and revise our target price to INR 2,000. However, given the sharp correction in the stock price, we believe there is meaningful upside to the stock. Maintain BUY.
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