After a sluggish performance this year, multiplex operator PVR-Inox received a boost on July 1 as shares rose 6 percent to Rs 1,512 apiece. This uptick was fueled by optimism surrounding strong box office collections and an impressive upcoming film slate.
The newly-released Prabhas' multi-starrer film 'Kalki 2898 AD' achieved remarkable box office success, becoming 2024's highest-grossing Indian film in just three days. The movie grossed an impressive Rs 415 crore worldwide, with over Rs 220 crore net in India, surpassing the previous record held by Teja Sajja’s Telugu film Hanu-Man, which collected Rs 350 crore globally.
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Additionally, PVR-Inox is generating buzz with a robust lineup of films, including Deadpool & Wolverine in July and Transformers One set for release by September 20. The film industry had experienced a slump in April and May, primarily due to a weak content calendar, heatwaves across the country, general elections, and the cricket season (IPL).
So far this year, the stock of this multiplex operator declined more than 9 percent, underperforming 10 percent rise in the benchmark Nifty 50 index.
Analysts at Nuvama recently noted that they expect the current unengaging plot to shift soon, driven by strong numbers for Kalki 2898 AD and Munjya.
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"The plot shall deepen as content slate picks up over the coming months. The overall picture has a lot more to offer like a compelling Hollywood line-up, recovery in ad revenues, and focus on net debt reduction," the brokerage firm said, reiterating a 'buy' call on PVR-Inox, with a target price of Rs 1,995 per share.
Analysts also expect the management to prioritise becoming net-debt free over the next few years. "PVR Inox will incrementally adopt ‘capital-light’ model, targeting a reduction of 20 percent in annual capital expenditure by exploring alternative models such as FOCO (Franchisee-owned, Company-operated), partnering with developers," they added.
Recently, the company announced the opening of four new screens at Prism Mall in Hyderabad. With this launch, PVR-Inox now operates the largest multiplex network with 1,757 screens across 362 properties in 113 cities in India and Sri Lanka.
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