Buy PVR; target of Rs 2340: Emkay Global Financial

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Emkay Global Financial's research report on PVR

PVR’s operating performance reflected the poor box-office collections in Q2FY23. Footfalls declined 28% QoQ, resulting in a 30% decline in revenue. ATP and SPH also declined sequentially from the all-time high in Q1FY23, attributable to weaker movie performance and special promotional offers. Ad revenue held up better, though it continues to be below pre-Covid levels. The company opened only 14 screens in H1FY23, even as Management stays confident of meeting its target of 110-125 screenadditions for FY23. In our view, content acceptance remains the primary factor for PVR’s success. Despite the weak performance in the quarter, we maintain our FY24/25 estimates, in the hope of a Bollywood content-reversal.

Outlook

However, if this weakness persists, the risk of an earnings cut and a de-rating looms large. We maintain BUY with an unchanged TP of Rs2,340/share (Sep-24E pro forma EBITDA).

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PVR - 181022 - emkay