Hold PVR Inox; target of Rs 1215: Prabhudas Lilladher

Prabhudas Lilladher's research report on PVR Inox

We cut our pre-IND AS PAT estimates by 14.9%/14.2% for FY26E/FY27E respectively as we re-align our screen opening timelines and footfall growth assumptions. PVR-Inox reported an in-line performance with pre-IND AS EBITDA margin of 13.8% (PLe 13.7%) led by strong performance from movies like Pushpa-2, Bhool Bhulaiya-3, and Singham Again. Given rising volatility in flow and acceptability of content, PVR-Inox is figuring innovative ways to boost footfalls like 1) scheduling re-runs 2) broadcasting trailers 3) offering passport plans and 4) providing private screening options. Nonetheless, footfall growth challenge continues to persist with occupancy hovering in the band of ~22-25% levels since last few quarters. While focus on rationalizing cost, reducing capex (adoption of FOCO & asset light model) and debt is commendable; footfall recovery remains key to re-rating.

Outlook

We expect sales CAGR of 10.4% over the next 2 years with pre-IND AS EBITDA margin of 14.4%/16.0% for FY26E/FY27E. Retain ‘HOLD’ on the stock with a TP of Rs1,215 (11x Sep-26 EBITDA; no change in target multiple).

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