PVR-INOX Q2 Results Review - Sequential Recovery; Q3 Likely To Be Robust: Motilal Oswal

Motilal Oswal Report

After weak Q1 due to elections, IPL and T20 Cricket World Cup, PVR-Inox Ltd. saw a recovery in occupancy to 25.7% in Q2 FY25 (from 20.3% in Q1), though it remained weak YoY due to a high base.

Revenue recovered sharply QoQ by 36% (in line; down 19% YoY on high base), aided by strong responses to movies like Stree 2 and Kalki 2898 AD.

Ebitda (pre-Ind-AS 116) bounced back to green at Rs 1.9 billion (10% beat) versus a loss of Rs 378 million in Q1. Margin expanded to 11.5% (75 bp beat).

We expect Q3 to be robust with the release of several tentpole movies, such as Pushpa 2, Bhool Bhulaiyaa 3, and Singham Again.

However, PVR’s business remains highly sensitive to occupancy trends, which are dependent on the quality of content (not in PVR’s control).

Although the management sounded upbeat about the FY26 content pipeline, we note that even a 200-300 bp blip in occupancy could derail the company’s screen economics.

We keep our FY25/FY26 revenue estimates broadly unchanged but revise our Ebitda estimates by +7%/-4%. Reiterate Neutral with a target price of Rs 1,750 (based on ~15 times pre-Ind-AS 116 Dec’26E Ebitda).

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