Broker’s call: PVR Inox (Accumulate)

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Target: ₹1,900

CMP: ₹1,739.80

Our channel checks show occupancy levels of PVR Inox have been well below par in October and November 2023 despite the movie Tiger 3 reporting net box office (BO) of ₹270 crore, as no other large Hindi or regional film has done well. Occupancy levels have been closer to 20 per cent (Oct/Nov’23), which is a mere 60 per cent recovery vs pre-Covid levels.

Further, concerns about Hollywood persists too, as the Writer’s Association strike has dragged supply and flow of updated content.

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Exhibitors break-even (EBITDA level) at around 18-19 per cent occupancy levels and such a performance will negatively affect profitability in Q3FY24; concerns also linger over Hindi films, as other key Hindi movies, such as Mission Raniganj, Yaariyan 2 and Ganapath Part 1 have reported lifetime boxoffice collection of a mere ₹32 crore, ₹3 crore and ₹13 crore, respectively.

Ad revenue has been a silver lining, as recovery has been about 90-95 per cent vs pre-Covid (75 per cent recovery on per screen basis) in Q3-FY24, led by the positive impact of the festival season; however, momentum may not continue in the near term, due to poor content across genres. Our channel checks show occupancy levels of PVR Inox have been well below par in October and November despite the movie Tiger 3 reporting net box office of ₹270 crore.