PVR-Inox Q1 preview: Loss likely as Bollywood disappoints; content pipeline solid

The June quarter earnings of PVR-Inox are likely to mimic recent quarters, a weak show. Marketmen tracking the sector noted that net box office collections (NBOC) for Bollywood and Hollywood genre, excluding regional movies, declined 14.6 per cent YoY to Rs 960 crore in 1QFY24. While The Kerala Story turned out to be a sleeper hit, subdued collections from movies like 'Kisi Ka Bhai Kisi Ki Jaan' (Rs 110 crore) and 'Adipurush' (Rs 280 crore) impacted overall performance for the quarter.

Analysts noted Adipurush's collections were sub-par, given the budget and huge expectations surrounding the movie that had pan-India appeal.

"Hindi movies continued to be below expectations due to content quality and fewer launches on account of poor planning by the industry. In Q1FY24, Hollywood and regional movies garnered decent footfalls driven by quality content. Over the coming quarters, we will monitor the performance of Hindi movies and any impact of inflation on consumer spends," said Nuvama Institutional Equities.

This brokerage expects PVR-Inox to log a Rs 91.90 crore loss compared with a loss of Rs 333.40 crore in the March quarter. The year-on-year figures would not be comparable due to consolidation PVR's with Inox Leisure. Nuvama sees revenue rising 13.1 per cent sequentially to Rs 1,292.38 crore compared with Rs 1,143.17 crore in the March quarter.

Brokerage Prabhudas Lilladher said it expects PVR-Inox to report footfalls of 3.3 crore for the quarter with pre Ind-AS Ebitda margin of 5.8 per cent. This brokerage has suggested a loss of Rs 70 crore for the March quarter. It sees revenue rising 17.3 per cent sequentially Rs 1,341.40 crore.

Given the likely weak Q1 show, it has cut its pre-IND AS Ebitda estimates for PVR-Inox by 9 per cent for FY24 and 8 per cent for FY25 but retain ‘BUY’ on the stock with a revised target of Rs 1,704 (14.5x Sep-24 EBITDA) as content pipeline for near-term is healthy with movies like Gadar-2, Oh My God-2, Jawan, Dream Girl-2, MI-Dead Reckoning and Oppenheimer in pipeline.

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