PVR-Inox Q2 likely to be back in black amid strong box office collections

The multiplex chain has opened 37 new screens during the July-September quarter

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PVR-Inox is set to report a standout performance in the July-September quarter for 2023-24 (Q2FY24) thanks to back-to-back strong movie releases that aided box office collections, projected analysts. The multiplex operator is likely to turn profitable in Q2FY24, recovering its losses from previous quarter as merger synergies between PVR and Inox start to play out as well.

The company Q2 report card is scheduled to be released on October 19.

According to an average estimate of five brokerages, PVR-Inox is expected to report a profit of Rs 153 crore in Q2FY24 from a loss of Rs 81 crore booked in Q1FY24.

The company’s revenue is pegged to rise 43 percent quarter-on-quarter to Rs 1,873 crore in Q2FY24 as at least eight movies crossed Rs 100-crore net box office collection (NBOC) mark during the quarter (see table).

Hindi movies like Jawan and Gadar-2 grossed more than Rs 500 crore each. Among films in other languages, Jailer was the standout performer, collecting over Rs 300 crore.

Others that breached the Rs 100-crore mark included Dream Girl-2, OMG-2, Rocky aur Rani ki Prem Kahaani (all Hindi), Oppenheimer and Mission Impossible: Dead Reckoning (Hollywood offerings).

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Owing to better box office performance, analysts expect the footfall recorded to sharply improve 38 percent sequentially to 46.8 million. As a result, the average ticket price (ATP) is expected to see an improvement to Rs 262 (from Rs 246 in Q1FY24). The spending per head (SPH) too is likely to show steady growth of 2 percent from the first quarter to Rs 132 as post-merger synergy realisations persist.

That apart, PVR-Inox’s earnings before interest, tax, depreciation, and amortisation (EBITDA) may jump to 86 percent over the previous quarter to Rs 655 crore in the September-ended quarter, as per consensus. EBIDA margin is expected to improve by 813 basis points (bps) to 35 percent in Q2FY24 as occupancies are expected to have reached pre-Covid levels of 30 percent.

The multiplex chain opened 37 new screens during the July-September quarter.

Analysts at Emkay Global foresee a strong cinematic pipeline in the third quarter as well, though bigger movies are bunched for release in the second half of the quarter.

“The performance of movies seems to have finally turned a corner after a prolonged inconsistency. The back-to-back hits have resulted in revival of footfalls in theatres, with all three—Bollywood, Hollywood and regional movies—contributing to the success,” the brokerage firm added.

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However, the writers’ strike in Hollywood, which lasted for nearly five months, is likely to have an impact on the pipeline of international movies for the next couple of quarters, warned analysts.

Those at Nuvama Research underlined that though content issues in Hindi movies were hopefully behind, analysts would continue to monitor performance of Hindi films at the box office and see if there is any meaningful impact of inflation on consumer spending.

“We anticipate PVR-Inox to clock consolidated revenue of Rs 6,500 crore by the end of this fiscal year (FY24), pricing in content issues and occupancy rates,” they wrote.

The October-December quarter (Q3FY24) houses a decent line-up of movies across genres. Some prominent titles include Mission Raniganj (starring Akshay Kumar), Ganpath (starring Tiger Shroff), Leo (starring Vijay) and Killers of Flower Moon (starring Leonardo DiCaprio).

In November-December, movies like Tiger-3 (starring Salman Khan), The Marvels, Animal (starring Ranbir Kapoor), Yodha (starring Sidharth Malhotra), Salaar (starring Prabhas), Dunki (starring Shah Rukh Khan) and Aquaman and the Lost Kingdom is set to release.

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