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

Emkay Global Financial's research report on PVR INOX

PVR Inox’s Q2 results reflect better box office performance after a disappointing Q1. Footfalls, ATP, and SPH all improved in Q2 and were slightly higher than our estimates. Occupancy also increased to 25.7% from 20.3% in Q1. Although Hindi cinema NBOC saw a rebound in box office collections (QoQ), it was largely led by single movie performance. Growth in Regional NBOC was more broad-based and the Hollywood slate remained weak. Looking ahead, the upcoming pipeline is healthy, which provides comfort for strong box office collections for Q3. Movies starring mega stars should pick-up in the next calendar year. The management is also optimistic on producers churning out more movies, which should aid occupancies. On the cost front, the management is taking multiple steps to improve profitability, though most of these should bear fruit over the medium term, in our view.

Outlook

We tweak our FY25-27E EBITDA by ~1% factoring in Q2 results and maintain BUY with a TP of Rs1,850/share (12x Sep-26E pre-INDAS EBITDA).

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