PVR Inox Q1 Results Review - Muted Quarter As Expected; H2 CY24 Pipeline Looks Robust: ICICI Securities

ICICI Securities Report

We believe CY24 could be a tale of two halves for theatrical content market in India. Q1 FY25 was disrupted by Lok Sabha elections and the busiest sporting season in recent memory (IPL, T20 World Cup, Euro Cup, Copa America), which caused producers to delay the scheduled releases.

We now see a pent-up content pipeline (mentioned below) which is likely to help in reversing the losses of H1 CY24. In particular, Q3 FY25 could rival the success of Q2 FY24, in our view.

We look forward to more clarity on:

1. Effectiveness of ‘passport’ programme,

2. partnership with Devyani to launch food courts and potential impact on spends per head,

3. update on negotiations with landlords on revenue/capex sharing,

4. outlook on ad revenue and

5. monetisation of non-core assets.

Reiterate Buy with target price at Rs 2,000.

PVR Inox Ltd.'s Q1 FY25 performance

Revenue was Rs 11.9 billion (down 5.2% QoQ/8.8% YoY), 2.6% higher than our estimates. Adjusted Ebitda loss was Rs 378 million (our estimate: Rs 523 million loss). Net loss was Rs 1.7 billion. Admits decreased 6.7% QoQ/10.3% YoY to 30.4 million in Q1 FY25.

There was also a sequential decline of 230 bps to 20.3% in occupancy. Average ticket price grew to Rs 235, down 4.5% YoY (up 0.9% QoQ) and food and beverage spend per head was Rs 134 (up 3.9% QoQ/3.1% YoY).

Ticketing revenue declined 15% YoY to Rs 5.93 billion. F&B revenue was down ~6% YoY to Rs 4.01 billion. Ad revenue grew 5% YoY (down 10.6% QoQ) to Rs 1.02 billion.

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