Emkay Global Financial's research report on PVR INOX
PVR Inox’s Q4FY23 results (first as a merged entity) reflected weak box office performance, as revenue declined by 21.5% QoQ to Rs11.4bn (pro-forma for Q3FY23), slightly below our estimates. Footfalls at 30.5mn were tad below our estimates, while ATP and SPH were broadly in-line. Bollywood’s inconsistent performance persisted with only two movies breaching the Rs1bn barrier. The company has highlighted that it will shut 50 screens over the next six months, culling out non-profitable screens. Screen addition guidance of 150-175 screens for FY24 is slightly lower than the previously stated number of 180-200. Additionally, the company will realign the upcoming handover of new sites for fit outs till the full business recovers, indicating a calibrated strategy for screen additions.
Outlook
We have cut our FY24/25 EBITDA estimates by 10-15% to factor in screen closures, lower screen additions, and slower ramp-up in film releases and have arrived at a revised TP of Rs1,700, (11.5x Mar-25E pre IND-AS EBITDA).
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