PVR Inox share price falls 3% even as strong occupancy lifts Q2 results. ‘Jawan’, ‘Gadar 2’ wins the show

PVR Inox Ltd share prices were down almost 3% on Friday.

PVR Inox had reported a very strong performance for the quarter ending September on Thursday helped by rising footfalls and better occupancy.

The record-breaking performance of the Hindi box office. ‘Jawan’ and ‘Gadar 2’ ranked amongst the highest-grossing Hindi films of all time lifted overall Q2 performance. Other mid budget movies as ‘Rocky aur Rani ki Prem Kahani’ and ‘Oh my God 2’ and ‘Dream Girl 2’ and even ‘Fukrey 3’ opening at the end of quarter made reasonable contributions. The Hollywood movies as ‘Oppenheimer’ ‘Mission Impossible: Dead Reckoning Part 1’ set a fantastic tone while of regional front, ‘Jailer (Tamil),’ featuring Rajinikanth, stood out with an impressive box office collection.

PVR Inox average ticket price (ATP) in the September quarter was the highest ever at ₹276, while F&B spend per head was at ₹136. Footfalls rose 64% to 48.4 million from 29.6 million, YoY.

Also Read – PVR Inox Earnings: Post-merger EBITDA synergy benefits at ₹124-143 crore in H1

Not surprising the analysts as Jinesh Joshi said that it was “Best ever quarter for PVR Inox

The Earnings before interest, tax, depreciation and amortization (Ebitda) during the quarter for PVR Inox at 706.8 crore from ₹353 crore sequentially, while the Ebitda margin improved by a huge 830 basis points (bps) sequentially from 27% to 35.3%.

PVR Inox also clocked a net profit of ₹166.3 crore for the second quarter of FY24 as compared to a loss of ₹82 crore in the first quarter of this fiscal. The company’s revenue in Q2 jumped 53.3% to ₹1,999.9 crore from ₹1,305 crore in Q1.

The content remains the key for such a good performance being repeated by PVR Inox in subsequent quarters. Anlystts at Motilal Oswal Financial Services Ltd (MOFSL) said that the healthy content pipeline in 3QFY24 could help the company sustain the current occupancy level for the near term. Increased competition from OTT platforms will be a key monitorable as business remains highly sensitive to occupancy and even a 200-300bp impact could derail screen economics.

Also read- Hindustan Zinc Q2 Results: Net profit drops 35% to ₹1,729 crore; revenue down 18% YoY

The festive season may support prospects in upcoming quarters there is a healthy content pipeline too that will remain supportive for performance as investors will remain watchful on similar performance in upcoming quarters. 

Prabhudas Lilladher’s Joshi said that while the current quarter performance may be difficult to replicate content pipeline for near term is healthy for PVR Inox with movies like Animal, Tiger-3, Dunki, Salaar, and Leo in pipeline.

The positive as per Joshi is also that following strong performance in 2QFY24, PVR-Inox’s balance sheets strength has improved with net debt reduction of Rs327.6 crore and now the company is on track to be Free cash flow positive in FY24. The return ratios will thereby improve too.

Meanwhile the synergy benefits of PVR Inox merger have also started accruing during first half after the completion of merger in February 2023. As per Inox PVR the Ebitda synergy benefits to the tune of ₹124 crore to ₹143 crore were seen during the first half.

Though ad-revenue recovery is delayed, synergy benefits from the merger have started playing out thereby boosting Ebitda, said Joshi.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 20 Oct 2023, 04:49 PM IST