On Wednesday, UBS maintained its Buy rating on PVR Inox Ltd (PVRINOX:IN), while increasing the stock's price target from INR1,800.00 to INR1,950.00. The adjustment comes after the company reported a strong performance in the second quarter, surpassing UBS's expectations with a 36% quarter-over-quarter revenue growth. This surge was attributed to the success of several key films, including the highest-grossing Hindi movie "Stree 2".
Despite the robust quarter-over-quarter growth, PVR Inox's revenue saw a 19% year-over-year decline due to a high comparison base from the previous year. UBS analysts have a positive outlook for the second half of the fiscal year 2025, particularly for the third quarter, which is anticipated to benefit from potential blockbuster releases.
The company's management has indicated that they expect the third quarter's performance to mirror that of the second quarter of fiscal year 2024, which was the company's best quarter historically. A strategy that has been well received is the re-release of popular films, which contributed to 6% of the second quarter's admissions, underscoring the continued demand for high-quality movie experiences.
UBS has updated its revenue and operating profit forecasts for PVR Inox, taking into account the company's second-quarter achievements. However, the firm noted that adjustments to lease amortization assumptions have led to a reduction in earnings projections. Despite this, the changes have not affected UBS's valuation of the company, leading to the raised price target of INR1,950.00.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.