Buy PVR INOX; target of Rs 1850: Emkay Global Financial

Emkay Global Financial's research report on PVR INOX

Post Covid, PVR Inox’s stock performance has been tracking box office collections/upcoming pipeline. After a dull H1CY24, box office collections have picked up and are expected to further improve in Q3FY25. We note a couple of key trends in movies: i) dichotomy in performance of big-budget and midsize/small movies – big-budget movies that offer differentiated content / experience are seeing more traction; ii) better performance of franchisee movies. The Q3 movie pipeline ticks these boxes and provides comfort on better box office performance, even as we remain cognizant of the structural issues hampering the industry. To improve profitability, mgmt is extensively working on cost control measures, some of which though we reckon may only fructify in the medium term.

Outlook

We tweak FY25-27E EBITDA by 0-2%, factoring in the recent NBOC, but raise target multiple to 12x (from 11.5x), given a better content pipeline; retain BUY; revise up TP to Rs1,850 (12x Sep-26E pre-IndAS EBITDA).

For all recommendations report, click here