PVR Inox needs to sustain the good picture beyond Sep quarter
The Vaccine War, Tiger 3, Animal, Dunki and Leo. However, a key risk to footfalls in the December quarter is the 2023 ICC Men’s Cricket World Cup matches, which start 5 October. To curtail the potential adverse impact to some extent, PVR Inox plans to specifically screen the matches played by India.
The September quarter results are expected to be solid with movies such as Jawan, Gadar 2, Jailer, Rocky aur Rani kii Prem Kahani and Oppenheimer performing well. Thus, occupancy levels are likely to be higher than 22.3% seen in the June quarter. For FY24, Kotak Institutional Equities expect PVR Inox’s occupancy to settle at 28%, a tad higher than the earlier estimate of 26.5%.
Notably, this is still below the pre-pandemic levels of 31-32%. “We believe that the recent trends partially ease concerns around structural risks and calls for some re-rating. We raise FY2024-26 Ebitda estimates by 5-24%," said Kotak’s analysts in a report on 25 September.
Ebitda is earnings before interest, tax, depreciation and amortization. But consistency is key. Earnings visibility would improve on continued momentum in content performance and in turn, aid the sentiments for the stock.
“While big budget movies are delivering, smaller ones are not firing enough. For now, the PVR Inox stock seems to be factoring these positives, but near-term catalysts are missing as it may struggle to keep its occupancy rates near pre-covid levels, post a strong September quarter performance," said Karan Taurani, an analyst at Elara Securities (India). Moreover, ticket prices have gone up and that would weigh on footfalls, he added.
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