On Wednesday, Elara Securities India updated its outlook on PVR Inox Ltd (PVRINOX:IN), raising the price target from INR1,900 to INR1,950 while sustaining a Buy rating on the stock. The adjustment follows PVR Inox's robust second-quarter performance, which was highlighted by a 25.7% occupancy rate and a 38.8% quarter-over-quarter increase in footfalls.
The company also saw growth in its average ticket price (ATP) and spend per head (SPH), with rises of 9.4% and 1.5% respectively, compared to the previous quarter. These positive trends are anticipated to continue into the second half of the year, bolstered by a strong content pipeline that is expected to drive further growth.
Elara Securities India notes the company's ongoing cost containment strategies and the strategic management of screen operations as positive factors contributing to the near-term operating margins. The new price target is based on 13.8 times the one-year forward EV/EBITDA (pre IND-AS), with the valuation rolled over to December 2026 estimates.
The analyst also pointed out potential risks that could affect the stock's performance. These include a lackluster box office showing and any setbacks in the company's ability to maintain its cost-containment measures. These factors were identified as key risks to Elara Securities India's recommendation.
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