BofA Securities updated its outlook on PVR Inox Ltd (PVRINOX:IN), raising the price target to INR1,860 from INR1,820, while reiterating a Buy rating on the stock. The adjustment follows PVR Inox's reported second-quarter revenue, which showed significant growth.
PVR Inox recorded a quarterly revenue of INR 16.2 billion, marking a 36% increase from the previous quarter. Although year-over-year comparisons are challenging due to an exceptionally strong quarter last year due to hit releases, the current figures demonstrate robust revenue momentum. The company's EBITDA for the quarter was reported at INR 1.8 billion, surpassing BofA Securities' expectations. The EBITDA margin, excluding other income and pre Ind-AS, expanded to 11.5%, exceeding the anticipated 8.9%.
The company's profit after tax (PAT) for the second quarter was INR 227 million, a significant recovery from the INR 1.36 billion loss in the previous quarter. This turnaround was attributed to a strong movie release schedule, which led to a resurgence in box office collections.
This resurgence was reflected in a 41% quarter-over-quarter increase in ticket sales and a 30% rise in food and beverage revenues. Advertising revenues also saw a positive uptick of 17% from the previous quarter.
Despite a net reduction of 1% in screen count to 1,745, due to the opening of 16 new screens and the closure of 25 underperforming ones, the average ticket price (ATP) and spend per head (SPH) grew by 9% and 1% respectively. The company also experienced a 28% increase in footfalls to 38.8 million and reported an occupancy rate of 25.7%. Additionally, re-released films contributed to approximately 6% of second-quarter admissions.
The financial health of PVR Inox appears stable as it ended the quarter with INR 5.7 billion in cash and a slight decrease in net debt to INR 11.5 billion. With an optimistic view of the upcoming movie release slate, BofA Securities anticipates a stronger performance in the third quarter.
Following the second-quarter results, BofA Securities has marginally tweaked its estimates and adjusted the price objective accordingly, while maintaining a positive outlook on the company's stock.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.