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News: PVR Inox performance was sequentially better QoQ led by decent content performance of movies like Stree 2 (₹ 600+ crore), Deadpool & Wolverine, Kalki (spillover) in Q2. The performance, however, was weak on YoY basis as Q2FY24 was the best ever quarter with two ₹ 500+ crore movies like Pathan and Gadar 2. Reported revenue came in at ₹ 1622 crore, (up 36.2% QoQ but down 18.9% YoY) with box office revenue of ₹ 838 crore (up 41.1% QoQ, down 25.2% YoY). The footfalls were up 28% QoQ, down 20% YoY at 38.8 million and (Average Ticket Prices) ATP at ₹ 257 was up 9% QoQ, down 6.9% YoY. Ad revenues were up 17% QoQ, down 7% YoY at ₹ 109 crore. F&B spends per head was flattish YoY at ₹ 136. EBITDA (without impact of Ind AS116) was at ₹ 187 crore (margins of 11.5%) vs. loss of ₹ 38 crore in Q1 and EBITDA of ₹ 428 crore (21.4% margin) in Q2FY24.
Views: Near term monitorable is content performance consistency. We expect a strong Q3FY25 led by content pipeline such as Pushpa 2, Bhool Bhulaiyaa 3, Singham Again, Gladiator 2, Mufasa: The Lion King, etc. Thus, we believe that H2FY25 may lead overall revenues and profitability recovery. For the medium to long term, key trigger will be operating leverage led benefits, management measures on deleveraging and rationalising capex (companies trying out capital efficient capex models like Franchise owned, Company Operated and capex sharing).
Impact: Neutral