Hold PVR Inox; target of Rs 1474: Prabhudas Lilladher

Prabhudas Lilladher's research report on PVR Inox

PVR-Inox reported weak performance in 1QFY25 with pre-IND AS EBITDA loss of Rs381mn led by 1) lower number of releases amid general elections, 2) absence of blockbuster content, barring Kalki 2898 AD, and 3) strike in Hollywood. As the movie calendar is considerably better in 2HFY25E with movies like Pushpa-2, Singham Again, Sitare Zameen Par, and Bhool Bhulaiya-3 scheduled to hit the big screen post Oct’24, we expect sharp recovery in BO fortunes in the second half. We believe PVR-Inox is in the reset mode, where the focus is on rationalizing cost, reducing capex and debt, which should yield results once content flow stabilizes. We broadly maintain our estimates and expect pre-IND AS EBITDA margin of 14.5%/16.7% for FY25E/FY26E.

Outlook

Retain ‘HOLD’ on the stock with a TP of Rs1,474 (earlier Rs1,480) by assigning EV/EBITDA multiple of 12x (no change).