Adipurush releases today: Can the Ramayana-themed movie lift PVR Inox shares?

Prabhas and Kriti Senon Starrer 'Adipurush' is all set for silver screen release on Friday, June 16. The mythological drama based on the Hindu epic 'Ramayana' remained under a host of controversies ever since its teaser and trailer were released. However, PVR-Inox has high hopes from Adipurush, which has a whopping budget of Rs 500 crore.

Analysts covering PVR Inox are positive on the stock, considering the high number of footfalls and advance booking for the epic-drama based on Lord Rama and his 14-year exile. They are pinning high hopes on the movie can and say that the cash registers might be ringing for the company in Q1 FY24.

According to the prima facie estimates, Adipurush is likely to collect Rs 100-120 crore in terms of worldwide gross box office collection on day one of its release. The movie will release on over 6,200 screens in India, which includes 4,000 screens for the Hindi version.

So far, 4 movies have crossed the net box-office collection (NBOC) barrier of Rs100 crore in 1QFY24E and if Adipurush is able to net upwards of Rs 500 crore, we believe PVR-Inox will report a better performance than 4QFY23, said Prbahudas Lilladher in its report. 'Bhola' was released on March 30 and netted Rs 80 crore. Hence, the spillover has happened in 1QFY24E it said.

There are quite a few movies like 'Zara Hatke Zara Bachke', 'Guardians of the Galaxy', 'Virupaksha' and 'Transformers-Rise of the Beast' that have done well aiding collections for the quarter. 4QFY23 had 3 regional movies from the south, it said.

"However, NBOC share of multiplexes for Southern movies is typically lower as that market is dominated by single screens. Thus, overall, we believe 1QFY24E can post a better performance than the previous quarter as hopes are riding high on Adipurush," Prabhudas Lilladher added with a buy rating and a target price of Rs 1,879 on the stock.

Advance booking trends are encouraging and the performance of this film will be critical for PVR-Inox’s fortunes in 1QFY24E, said analysts. Ongoing summer holidays in northern Indian and increasing discretionary expenditure are the other factors that may lift the Bollywood collections.

Nuvama Institutional Equities is anticipating bumper numbers from ‘Adipurush’ and expects footfalls will likely be stronger than expectations – PVR INOX to lead the major chunk. For its first weekend, PVR INOX has already sold more than half-a-million tickets and expects this number to re-rate further, it said with a buy rating on PVR-Inox.

"We see a significant chunk of revenue originating from southern India, mainly as Telangana government grant’s ticket price hikes for the film and 31 per cent of PVR INOX’s screens are in south India with high occupancy. That said, as highlighted in our latest report, and in the wake of a decent run in April and May, we expect fruitful revenue in June," it said with a target price of Rs 1,990.

If Adipurush is able to pull masses to the theatres, it will pave the way for many much-awaited movies including Kartik Aryan's ‘Satyaprem Ki Katha’, Sunny Deol's 'Gadar 2', Akshay Kumar's 'OMG 2', Ayushmann Khurrana's 'Dream Girl 2' and Shahrukh Khan's 'Jawan', which are set to release in next 4-8 weeks.

"Overall, on the content front, FY24 looks promising, with some prominent releases. The content issue, which the Bollywood industry had been facing since FY22, needs to be addressed. We believe both OTT and cinemas would co-exist – evident in the south. PVR INOX is spending INR7bn this year on new screens. We remain enthusiastic about the sector at large," Nuvama added.

Shares of PVR were trading flat on Friday around Rs 1,500 mark after a 7 per cent rise in the last one week. Brokerage firms see an up to 27 per cent upside in the stock from current levels.

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