Buy PVR INOX; target of Rs 2200: Sharekhan

Sharekhan's research report on PVR INOX

PVR INOX reported revenues of Rs 1999.9 crore, up 53.3% q-o-q, beating our estimate of Rs. 1,904 crore driven by robust box office collections (BO), up 109% y-o-y from strong Bollywood, Hollywood and regional performances. EBITDA margin (Ind-AS 116 adjusted) improved to 21.4%, beating our estimates of 20.8%, driven by strong operational performance. Average ticket prices (ATP) /SPH grew by 25%/15% y-o-y respectively. PVR INOX realized a total of Rs. 1240-1430 million in merger synergies in H1FY24. Management is optimistic on the robust content line-up across languages. The company expects greater traction and momentum in Advertising income, especially with the release of significant blockbuster films in the upcoming two quarters. With a strong content pipeline across all languages and benefits of merger synergies, the uptick in operational metrics is expected to gain further traction.

Outlook

Hence, we maintain a Buy on PVR with unchanged PT of Rs. 2,200. At CMP, the stock trades at 21.4x FY26E EPS and 10.6x FY26E EV/ EBITDTA.