PVR INOX Share Price: The year 2023 is going great from the point of view of Bollywood. Coming out of the bad times of Covid-19, the craze for Indian cinema is once again visible among the customers. People are now preferring to watch films not only on OTT but also by going to theatres. This year there were 4 such Hindi films, whose domestic collection (Box Office Collection) crossed Rs 500 crore. Furthermore, due to big budget movies, footfall in theaters is going to be high, which will benefit multiplex chains like PVR-Inox. At present, good returns are expected in this multiplex stock. Brokerage house Sharekhan has advised to invest in it with a target price of Rs 2200.
Talking about this year, Pathan, Jawan, Gadar-2 and Animal have earned more than Rs 500 crore at the domestic box office. At the same time, regional films like Jailor, Leo and Bhola Shankar also earned huge money. Tiger-3 and Oh My God-2 also succeeded in attracting huge crowds to the theatres. The company continues to add new screens with the addition of 22 new screens during the current quarter. The company has added 68 new screens in the first half of fiscal year 2024.
Strong December quarter, strong collections expected in future also
Brokerage house Sharekhan says that PVR INOX is expected to benefit from strong box office collections in the coming days also. Apart from Hindi blockbuster Animal, Tiger 3 has also earned huge money at the box office in the December quarter. Among regional films, the box office also got strong support from Leo (Tamil) and Bhagvath Kesari (Telugu). Similar support is expected to continue in the coming weeks from the newly released films Dunki (Hindi), Salaar (Telugu), Aquaman and the Lost Kingdom (Hollywood), Neru (Malayalam) and Kabuliwala (Bengali).
More growth in operating metrics
The brokerage house says that following the strong improvement in occupancy and ad revenue in Q2FY24, we expect the company to achieve further improvement in operating metrics due to the continuation of the strong content pipeline. Buoyed by strong box office collections, the brokerage expects a sales CAGR of 30 percent during FY2023-FY2026E. At the same time, buying advice has been maintained on the stock with a target of Rs 2200. The strong content pipeline across all languages is expected to help drive box office collections and gain further traction in operational metrics, while merger-related revenue and cost synergies will help drive strong cash flows, leading to potential debt reduction .
What are the main risk factors?
(1) Emerging competition from OTT players, (2) Degradation in content quality may impact viewership and advertising revenues, (3) Inability to make substantial price hikes at the right time due to rising input costs Food and Margins will be impacted in the beverage (F&B) segment, and (4) another increase in COVID-19 cases.
(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of digitnews. There are risks in the market, so take expert opinion before investing.)