PVR-INOX - Challenged, But Unbroken, Initiate Coverage With Buy: Yes Securities

Yes Securities Report

PVR-INOX Ltd. has displayed a noteworthy resilience and adaptability to the changing landscape of movie exhibition industry in recent times. We believe the worst is behind for the movie exhibition industry and PVR-INOX is likely to be the key beneficiary, given its market leadership and pan-India presence.

Further, threat of OTTs has diminished with consumer preferring theatrical experience for good content. We initiate coverage on the stock with a Buy rating owing to:

1. Expected industry-wide revival in occupancy rates,

2. various initiatives for reviving footfalls,

3. Cost rationalization to act as margin lever,

4. Improvement in ROCE.

We value the stock at FY27E EV/Ebitda multiple of 14 times and target price of Rs 1,980. Reiterate Buy.

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