Kalki 2898 AD, Deadpool & Wolverine: Footfalls likely to pick up for PVR Inox. Should you buy stock?
Kalki 2898 AD: Nuvama said there are expectations that it may see gross collections of Rs 100 crore in India on Day 1. The film secured a historic feat by becoming the first Indian film to surpass $2.6 million in pre-sales in the US.
- Jun 25, 2024,
- Updated Jun 25, 2024 8:37 AM IST
After seven lacklustre months, movie content is likely to improve with a couple of films lined up such as Kalki 2898 AD this week, Deadpool & Wolverine (July) and Transformers One (September 20). The film Industry had a dull show in April and May, largely due to a weak content calendar, heatwave in vast swathes of the country, general elections and cricket (IPL).
Nuvama in its latest note on PVR Inox said: "The unengaging plot could soon take a turn given likely strong numbers for Kalki 2898 AD (potentially Rs 100 crore India collections on Day 1 this Thursday) and Munjya (likely to clock Rs 100 crore in June itself)."
The plot shall deepen as the content slate picks up over coming months, it said. "The overall picture has a lot more to offer—for instance, a compelling Hollywood line-up, recovery in ad revenues (which are high-margin) and focus on net debt reduction (INR1,367mn in FY24). All in all, we reiterate ‘BUY’ on PVR Inox with a target price of Rs 1,995," it said.
In the case of Kalki 2898 AD, Nuvama said there are expectations that it may see gross collections of Rs 100 crore in India on Day 1. The film has already made headlines globally and secured a historic feat by becoming the first Indian film to surpass $2.6 million in pre-sales in the US, wherein by advance booking, it ranks among the top four highest-grossing premieres in Telugu and holds the record for the second-highest number of screenings, Nuvama said.
"Key marketing activities such as unveiling of the theme song in Mathura and early-morning shows bode well. Initial advance bookings response (domestic) for the film seems to be promising with tickets worth Rs 6.08 crore sold," Nuvama said.
Nuvama said the Hollywood content is expected to pick up following the settlement of the writers’ strike last year. With Deadpool & Wolverine starring Ryan Reynolds and Hugh Jackman lined up for July 26 and Transformers One starring Scarlett Johansson and Chris Hemsworth lined up for September 20, Hollywood pipeline is positive, it said.
The brokerage said PVR Inox's management’s priority is to be net debt-free over the next few years. In this context, the company is evaluating monetisation of real estate assets (likely Rs 300–400 crore in value).
PVR Inox will incrementally adopt ‘capital-light’ model, targeting a reduction of 20 per cet in annual capital expenditure by exploring alternative models such as FOCO (Franchisee-owned, Company-operated), partnering with developers, Nuvama said.
Meanwhile, it noted that ad revenues improved 18 per cent YoY to Rs 1,958 crore for PVR Inox in FY24. According to IPG Mediabrands Magna Global Advertisement forecast, the Indian advertisement market is expected to grow at 11.8 per cent in 2024 on the back of improving macros and consumption for FMCG sector.
"We expect this megatrend to benefit cinema advertisement as well, with PVR INOX being the dominant multiplex player, whose 30–35 per cent of ad revenues come from long-term deals with advertisers," the brokearge said.
After seven lacklustre months, movie content is likely to improve with a couple of films lined up such as Kalki 2898 AD this week, Deadpool & Wolverine (July) and Transformers One (September 20). The film Industry had a dull show in April and May, largely due to a weak content calendar, heatwave in vast swathes of the country, general elections and cricket (IPL).
Nuvama in its latest note on PVR Inox said: "The unengaging plot could soon take a turn given likely strong numbers for Kalki 2898 AD (potentially Rs 100 crore India collections on Day 1 this Thursday) and Munjya (likely to clock Rs 100 crore in June itself)."
The plot shall deepen as the content slate picks up over coming months, it said. "The overall picture has a lot more to offer—for instance, a compelling Hollywood line-up, recovery in ad revenues (which are high-margin) and focus on net debt reduction (INR1,367mn in FY24). All in all, we reiterate ‘BUY’ on PVR Inox with a target price of Rs 1,995," it said.
In the case of Kalki 2898 AD, Nuvama said there are expectations that it may see gross collections of Rs 100 crore in India on Day 1. The film has already made headlines globally and secured a historic feat by becoming the first Indian film to surpass $2.6 million in pre-sales in the US, wherein by advance booking, it ranks among the top four highest-grossing premieres in Telugu and holds the record for the second-highest number of screenings, Nuvama said.
"Key marketing activities such as unveiling of the theme song in Mathura and early-morning shows bode well. Initial advance bookings response (domestic) for the film seems to be promising with tickets worth Rs 6.08 crore sold," Nuvama said.
Nuvama said the Hollywood content is expected to pick up following the settlement of the writers’ strike last year. With Deadpool & Wolverine starring Ryan Reynolds and Hugh Jackman lined up for July 26 and Transformers One starring Scarlett Johansson and Chris Hemsworth lined up for September 20, Hollywood pipeline is positive, it said.
The brokerage said PVR Inox's management’s priority is to be net debt-free over the next few years. In this context, the company is evaluating monetisation of real estate assets (likely Rs 300–400 crore in value).
PVR Inox will incrementally adopt ‘capital-light’ model, targeting a reduction of 20 per cet in annual capital expenditure by exploring alternative models such as FOCO (Franchisee-owned, Company-operated), partnering with developers, Nuvama said.
Meanwhile, it noted that ad revenues improved 18 per cent YoY to Rs 1,958 crore for PVR Inox in FY24. According to IPG Mediabrands Magna Global Advertisement forecast, the Indian advertisement market is expected to grow at 11.8 per cent in 2024 on the back of improving macros and consumption for FMCG sector.
"We expect this megatrend to benefit cinema advertisement as well, with PVR INOX being the dominant multiplex player, whose 30–35 per cent of ad revenues come from long-term deals with advertisers," the brokearge said.