Geojit Financial Services research report on PVR Inox
PVR Ltd. and Inox Leisure Ltd. merged on Jan-2023 and formed PVR Inox Ltd. It owns and operates multiplexes across in 113 cities, with a total of 1,754 screens in India and Sri Lanka. Major income segments for them are box office, food & beverage (F&B) and advertisement (Ad). In Q1FY25, revenue declined by 9% YoY to Rs. 1,191cr, mainly due to fewer film releases and no blockbuster hits during the election period. The weak content lineup resulted in a ~5% YoY decrease in average ticket price (ATP) to Rs. 235, and occupancy rates fell from 22.3% in Q1FY24 to 20.3% in Q1FY25, a 200bps decline. Several releases were postponed to Q2 and Q3, expected to boost revenues. The festival season demand looks promising, supported by a strong content pipeline. The lower-than-expected Q1 performance led to a downward revision of our estimates. However, the long-term outlook remains positive due to a strong content pipeline with re-releases.
Outlook
The stock remains attractive due to its appealing valuation. As a result, we are revising our rating to Accumulate while maintaining the target price at Rs. 1,709 based on 2.4x FY26E EV/Sales.
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