Dhurandhar quarter: PVR Inox gets its Secret Santa in Q3; what PL Capital says

PL Capital on Tuesday said the ongoing December quarter is shaping up to be a strong one for multiplex operators, led by a surprise hit in 'Dhurandhar' and the upcoming release of Avatar: Fire & Ash. The brokerage said industry-wide net box-office collections are already at around Rs 2,570 crore, with about 15 days still left in the quarter, raising the possibility of collections crossing the Rs 3,000 crore mark in Q3FY26.

PL Capital said Dhurandhar has emerged as a sleeper hit, with net box-office collections of about Rs 380 crore so far. With Avatar: Fire & Ash scheduled for release on December 19, the brokerage said industry-wide collections could breach Rs 3,000 crore in the quarter. It noted that post-Covid, industry box-office collections have crossed the Rs 3,000 crore mark only three times.

For now, PL Capital has 'Hold' rating and a target of Rs 1,211 on the stock.

"Dhurandhar has turned the tables in favour of PVR-INOX. Think of it this way. The movie has collected Rs 380 crore so far and could well be on track to achieve life-time collections of Rs 450 crore. Now, it is not as if movies haven’t netted Rs 400-500 crore in the past. However, few expected the movie to do so well and that is where the delta lies. For instance, if we eliminate performance of “Dhurandhar” from industry-wide collections of Rs 2,570 crore, the “Secret Santa” element for the quarter goes missing!," PL Capital said.

The brokerage said historical trends showed that whenever industry-wide collections breached Rs 3,000 crore, PVR Inox's pre-Ind AS Ebitda margins were typically healthy. It added that 3QFY25 was an exception, as collections were dominated by Pushpa-2, a regional film where PVR Inox's box-office market share is relatively low.

PL Capital said 3QFY26 is likely to be different and more comparable to stronger quarters such as Q2FY26 or Q2FY24. It highlighted that the share of Hindi-language collections in Kantara: A Legend Chapter-1, the highest netting film of the quarter so far, is higher than Kannada at around 36 per cent. Since PVR Inox's box-office share in regional languages tends to be lower, a stronger Hindi contribution reduces the risk of a Pushpa-2-like outcome repeating.

The brokerage also pointed to the Hollywood slate as a key support. PL Capital said PVR Inox's box-office market share in Hollywood films typically ranges between 55 per cent and 70 per cent. It noted that the previous film in the Avatar franchise netted about Rs 390 crore, suggesting meaningful upside from the upcoming release.

On estimates, PL Capital said that on a conservative basis, assuming industry-wide box-office collections settle at Rs 3,000 crore and PVR Inox's market share is around 30 per cent, the company’s net box-office collections could be about Rs 900 crore in 3QFY26. Given that net box-office collections typically account for around 50 per cent of PVR Inox's revenue, this implies topline of roughly Rs 1,800 crore for the quarter.