Buy PVR Inox; target of Rs 2240: ICICI Securities

ICICI Securities research report on PVR Inox

PVR Inox suffered in the first half of Q3FY24 due to the Cricket World Cup as big budget theatrical releases (Hindi) were moved to the second half. In addition, Hollywood content pipeline was weak (impacted by screenwriters strike). ‘Leo’ collected INR3.4bn and ‘Tiger3’ collected INR2.8bn (Nett. India). However, ‘Animal’ released on 1 st Dec’23 appears to be progressing towards becoming one of the top 10 blockbusters of all time. In 6 days, it has collected ~INR3.2bn (Nett. India), which is significantly higher than expectations. Over the same period, ‘Sam Bahadur’ collected ~INR0.4bn (Nett. India) with strong word of mouth promotion. Our channel checks indicate occupancy in PVR Inox in Dec’23 has been in the range of 55-60%. Given ‘Dunki’, ‘Salaar’ and ‘Aquaman’ are in the pipeline in Q3FY24, we re-iterate BUY..

Outlook

Our target price stands at INR 2,240 with an unchanged multiple of 16x 1-yr forward adj. EBITDA, in line with historical valuation multiples.