ICICI Securities research report on PVR Inox
We have believed that a weak content pipeline is to be blamed for the weak performance of the movie exhibition industry over the last year and not a structural shift in consumer behaviour towards OTTs, etc. We think Q3FY25E will likely to resolve investors’ concern on the above issue. Given the content line-up in Q3FY25E, we think that PVR Inox could post its strongest quarter yet, surpassing Q2FY24. We note, there are five mega-budget Indian movies slated to release in Q3FY25E. In addition, PVR Inox is in advanced negotiations to monetise non-core assets with an expected inflow of ~INR 3bn.
Outlook
Our channel checks also indicate that some of the mall owners are entering franchisee agreements with PVR Inox; this should help improve their capital efficiency. Reiterate BUY with an increased TP to INR 2,250.
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