PVR-INOX: Will Sitare Zameen Par, Raid 2 push Q1 sales higher?

PVR-INOX is expected to deliver a strong revenue growth and positive Ebitda margins in the first quarter of FY26, as per a preview note by Nirmal Bang Institutional Equities. The cinema chain is witnessing a resurgence in movie-goer interest, driven by successful content releases across Bollywood, Hollywood, and regional genres. This follows a disappointing FY25, offering a promising outlook for the current fiscal year.

The brokerage anticipates a notable year-on-year increase in footfall by approximately 10%, attributed to the revival in content quality. Movies such as 'Raid 2' and 'Sitare Zameen Par,' each generating over Rs 200 crore, have led the charge in box office collections. These successes, coupled with a strategic approach to content release, are expected to enhance PVR-INOX's financial performance.

In terms of financial metrics, PVR-INOX's net sales for 1QFY26 are projected to reach Rs 1,449.10 crore, marking a 21.7% year-on-year growth. The company is poised to record a positive EBITDA margin of 7%, rebounding from a negative margin in the previous year. The resurgence in the theatrical experience is further supported by a promising line-up for the remainder of FY26. Losses for the quarter is seen at Rs 29.30 crore.

PVR-INOX's focus remains on expanding its screen count, having added 20 new screens in the first quarter using various models, including the FOCO, asset-light, and traditional approaches. The company aims to add 100 screens annually in FY26 and FY27, leveraging a conservative capital deployment strategy. This expansion is crucial as it aligns with the company's broader growth objectives.

The cinema chain's advertisement income is also expected to revive, contributing significantly to the company's margins. Notably, advertising remains PVR-INOX's highest margin business, reinforcing the importance of this revenue stream in the overall financial strategy. The revival of this income stream is anticipated to further bolster profitability.

In terms of market share, PVR-INOX holds a significant position in Bollywood and Hollywood content, capturing 35-40% and 60-65% of these markets, respectively. However, its share in the regional box office remains modest at around 15%, indicating room for growth in this segment. Enhancing this share could provide additional revenue opportunities.

Investors will be keen to hear updates on several strategic initiatives, including the company's efforts to become more asset-light and the timeline for achieving net-zero debt. Additionally, PVR-INOX is exploring new ticket pricing strategies and initiatives to boost occupancy levels, which will be of interest in upcoming earnings calls.

The strong content line-up and strategic measures undertaken by PVR-INOX underscore a positive outlook for the company, with industry trends suggesting continued growth and profitability in the coming quarters. The performance in early FY26 sets a robust foundation for achieving its ambitious expansion and financial targets.