PVR-Inox Q3 Results Review - A Modest Performance: Prabhudas Lilladher

Prabhudas Lilladher Report

In a quarter marred by paucity of content due to cricket world cup, PVR-Inox Ldt.'s reported modest performance with footfalls of 36.5 million (our estimate: 36.3 million) and pre IND AS Ebitda margin of 13.1% (our estimate: 11.1%).

Though ad-revenue has shown signs of recovery volatility may persist unless occupancy stabilizes as 60- 65% of the business is on spot deals. In order to address concerns surrounding occupancy, PVR-Inox is likely to launch a pan-India subscription plan soon.

Nonetheless, we expect footfalls to remain a bit soft in near term as content pipeline for Q4 FY24 does not inspire much confidence.

We cut our Ebitda estimates by 1-4% over next two years and expect footfalls of 168 million/181 million with pre-IND AS Ebitda margin of 16.8%/17.8% for FY25E/FY26E respectively.

Retain ‘Accumulate’ on the stock with a target price of Rs 1,719 (earlier Rs 1,923) as we cut our target enterprise value/Ebitda to 13 times (earlier 14 times) amid rising volatility in flow, acceptance and predictability of content.

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