Vijay's Leo a hit at box office. What analysts say on PVR Inox shares?

With Vijay-starrer 'Leo' seeing strong traction at box office, analysts are quite optimistic on PVR Inox Ltd that just saw best-ever quarter in its history, as content across languages got connected with consumers.

ICICI Securities today cited a strong movie pipeline including upcoming big budget releases such as ‘Tiger 3’, ‘Animal’, ‘Dunki’ and ‘Salaar’ in the ongoing quarter, in addition to several mid budget releases include ‘Tejas’, ‘Sam Bahadur’, ‘Merry Christmas’ and ‘Yodha’. This, it said, would be complemented by a robust English and regional pipeline.

"We think the stock is a strong ‘Buy’ with 32 per cent upside. We have a target price of Rs 2,240, implying 16 times FY25 adjusted Ebitda," the brokerage said on PVR Inox.

ICICI Securities noted that there was a relatively muted movie pipe-line in the second half of September and the first half of October. Mid-budget movies capitalised on the opportunity with ‘Fukrey 3' (Rs 110 crore), ‘Mark Anthony’ (Rs 83.2 crore), ‘Kushi’ (Rs 57 crore) and ‘Nun 2’ (Rs 54.10 crore) doing well.

"Despite the excitement around the World Cup, ‘Leo’ (Tamil, released October 19) has collected Rs 140 crore (India GBO) in three days. PVR Inox recorded their highest ever revenue, admissions, Ebitda and PAT in Q2FY24. National Cinema Day drew 60 lakh people to theatres," ICICI Securities noted.

PVR Inox has reported a profit of Rs 166 crore for the September quarter compared with a loss of Rs 82 crore in the June quarter. Many brokerages last week suggested a 'buy' on the stock.

Nirmal Bang in its results review aid While the response to content across languages has been heartening, said it sees December quarter, being a festive quarter to be decent for PVR Inox, but it feels the September numbers may not be surpassed in the next 2-3 quarters, at least.

"While 3QFY24, a festive quarter, should be decent, we believe it will be impacted by World Cup and modest response to content in October-November. December 2023 is critical for a good 3QFY24 as some big movies release," it said.

This brokerage has target of Rs 2,090 on the stock.

"The content pipeline for H2FY24 is decent. We reiterate our positive stance on multiplexes over the medium/long term. Maintain ‘BUY’ on PVR Inox with an unchanged target price of Rs 2,210,' said Nuvama Institutional Equities.

Prabhudas Lilladher has retained its ‘BUY’ on the stock with a target of Rs 1,984 against Rs 1,862 earlier as it assigned PVR Inox an EV/Ebitda of 14 times and roll-forwarded its estimates to September 2025.

Prabhudas Lilladher in a note last week said while the September quarter's performance may be difficult to replicate, the content pipeline for near term is healthy with movies like Animal, Tiger-3, Dunki and Salaar.

 

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