Is PVR-Inox stock worth buying after Adipurush flopped at the box office?

Adipurush, which is based on the epic Ramayana, has been in B-town ever since its release. The film has received mixed reviews, however, most moviegoers have expressed disappointment with the Prabhas-Kriti Sanon starrer. However, Adipurush is not the only one struggling to win hearts, its muted performance is likely to affect multiplex giant PVR-Inox.

Adipurush, which is based on the epic Ramayana, has been in B-town ever since its release. The film has received mixed reviews, however, most moviegoers have expressed disappointment with the Prabhas-Kriti Sanon starrer. However, Adipurush is not the only one struggling to win hearts, its muted performance is likely to affect multiplex giant PVR-Inox.

In a research note, analysts at ICICI Securities expect PVR-Inox Q1FY24E likely to be muted from a revenue perspective due to weak performance of ‘Adipurush’.

In a research note, analysts at ICICI Securities expect PVR-Inox Q1FY24E likely to be muted from a revenue perspective due to weak performance of ‘Adipurush’.

According to Bollywood Reviewz website, on day 16, Adipurush collected 1.25 billion across India, but overall it increased 1.5 billion worldwide.

According to Bollywood Reviewz website, on day 16, Adipurush collected 1.25 billion across India, but overall it increased 1.5 billion worldwide.

Since its release on June 16, Adipurush is counting 292 billion in all languages ​​across India while the collection is approx 344.6 million as on July 2, as per the website. There is a film producer figure all over the world 450 crores while the collection of gross trade figures is at par 406.05 million.

Since its release on June 16, Adipurush is counting 292 billion in all languages ​​across India while the collection is approx 344.6 million as on July 2, as per the website. There is a film producer figure all over the world 450 crores while the collection of gross trade figures is at par 406.05 million.

Despite the bitter reaction from citizens, Adipurush is currently ranked 18th in the list of top Indian films at the global box office.

Despite the bitter reaction from citizens, Adipurush is currently ranked 18th in the list of top Indian films at the global box office.

The brokerage highlighted that PVR Inox was pre-booked 600,000 tickets for ‘Adipurush’ and managed to collect a net 1.05 crore in the first weekend.

The brokerage highlighted that PVR Inox was pre-booked 600,000 tickets for ‘Adipurush’ and managed to collect a net 1.05 crore in the first weekend.

However, the brokerage’s analysis shows that concerns about the impact of digital media (“watching OTT content at home” is replaced by “going to the theater”) and the ability of Hindi films to attract audiences to cinemas are unfounded.

However, the brokerage’s analysis shows that concerns about the impact of digital media (“watching OTT content at home” is replaced by “going to the theater”) and the ability of Hindi films to attract audiences to cinemas are unfounded.

And while ICICI Securities expects muted revenue growth for PVR-Inox in Q1FY24 due to weak performance from Adipurush, the broker still believes some signs of merger synergies should start to emerge, such as ATP and SPH improvement for the combined company. flow through.

And while ICICI Securities expects muted revenue growth for PVR-Inox in Q1FY24 due to weak performance from Adipurush, the broker still believes some signs of merger synergies should start to emerge, such as ATP and SPH improvement for the combined company. flow through.

It added: “We also believe that improvements in content quality should begin to reflect higher theater occupancy from Q2FY24E as we note a stronger content mix in the quarter.”

It added: “We also believe that improvements in content quality should begin to reflect higher theater occupancy from Q2FY24E as we note a stronger content mix in the quarter.”

According to the brokerage, on the back of an improved content line-up in Q4’24, which includes films like ‘Rocky Aur Rani Ki Prem Kahani’ (28-Jul-23), ‘Animal’ (11-Aug-23), “Gadar 2” (August 11). ’23) and ‘Jawan’ (7 September ’23), a breakthrough in Hindi cinema is quite possible. ’72 Hoorain’ (July 7-23), which we feel is similar to ‘The Kashmir Files’ and ‘The Kerala Story’, may turn out to be a blockbuster hit.

According to the brokerage, on the back of an improved content line-up in Q4’24, which includes films like ‘Rocky Aur Rani Ki Prem Kahani’ (28-Jul-23), ‘Animal’ (11-Aug-23), “Gadar 2” (August 11). ’23) and ‘Jawan’ (7 September ’23), a breakthrough in Hindi cinema is quite possible. ’72 Hoorain’ (July 7-23), which we feel is similar to ‘The Kashmir Files’ and ‘The Kerala Story’, may turn out to be a blockbuster hit.

It should also be noted that PVR Inox’s contribution to the gross box office collections (GBOC) of English films has increased. PVR Inox accounted for nearly 60% of Hollywood’s GBOC in India in Q3 2013, up from 25% in Q3, a sharp jump fueled by the merger.

It should also be noted that PVR Inox’s contribution to the gross box office collections (GBOC) of English films has increased. PVR Inox accounted for nearly 60% of Hollywood’s GBOC in India in Q3 2013, up from 25% in Q3, a sharp jump fueled by the merger.

Analysts at ICICI Securities believe that this indicates that PVR Inox is the preferred cinema for English moviegoers in terms of ambience and service quality. Also, English movies are more suitable for premium screens due to better graphics and relevance to premium audiences.

Analysts at ICICI Securities believe that this indicates that PVR Inox is the preferred cinema for English moviegoers in terms of ambience and service quality. Also, English movies are more suitable for premium screens due to better graphics and relevance to premium audiences.

Therefore, the broker believes that an increase in Hollywood’s share of GBOC could also increase profits for PVR-Inox in the medium term. Films like the Rajnikanth starrer Jailer (10Aug23) could potentially boost the box office.

Therefore, the broker believes that an increase in Hollywood’s share of GBOC could also increase profits for PVR-Inox in the medium term. Films like Rajnikanth starrer Jailer (10Aug23) could further boost the box office.

The brokerage is therefore bullish on PVR-Inox shares despite Adipurush’s weak performance as the pipeline looks attractive for the remaining quarters of FY24.

The brokerage is therefore bullish on PVR-Inox shares despite Adipurush’s weak performance as the pipeline looks attractive for the remaining quarters of FY24.

On the valuation, analysts said: “We see PVR Inox’s content direction improving over Q2FY24E and occupancy improving in tandem, so we expect the valuation multiple to return to historical averages on average. We have factored in revenue growth of 9.2% ( pro -forma) FY24E with 560 bps EBITDA margin (pro-forma) expansion.

On the valuation, analysts said: “We see PVR Inox’s content direction improving over Q2FY24E and occupancy improving in tandem, so we expect the valuation multiple to return to historical averages on average. We have factored in revenue growth of 9.2% ( pro -forma) FY24E with 560 bps EBITDA margin (pro-forma) expansion.

Accordingly, the analysts said, “Our target price is Rs 1,950 (previously: Rs 2,100) with an unchanged 16x FY25E EBITDA multiple. In our bull case, we see the stock trading at Rs 2,200 and in our bear case at Rs 1,150, implying risk and return bias of 3.56:1. Repeat BUY.”

Accordingly, the analysts said, “Our target price is Rs 1,950 (previously: Rs 2,100) with an unchanged 16x FY25E EBITDA multiple. In our bull case, we see the stock trading at Rs 2,200 and in our bear case at Rs 1,150, implying risk and a return bias of 3.56:1. Repeat BUY.”

One of the main risks for PVR-Inox would be—occupancy improvement to pre-Covid levels delayed beyond FY25E and lack of synergies/scale efficiencies of the merger.

One of the main risks for PVR-Inox would be—occupancy improvement to pre-Covid levels delayed beyond FY25E and lack of synergies/scale efficiencies of the merger.

Last week, the BSE PVR-Inox share price closed at On Friday, it decreased slightly by 1376 a piece. In the month of June, PVR-Inox shares on this exchange decreased by almost 4%. The year-to-date decline is over 20%.

Last week, the share price of BSE PVR-Inox closed at On Friday, it decreased slightly by 1376 a piece. In the month of June, PVR-Inox shares on this exchange decreased by almost 4%. The year-to-date decline is over 20%.

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