PVR Inox shares fall after 1st post-merger results. What analysts say ahead of conference call today

Shares of PVR Inox fell 4 per cent in Tuesday's trade after the multiplex owner reports its first ever quarterly results post merger. Ahead of the company's conference call at 12 pm today, Nuvama Institutional Equities said it would like to know from the management when can one expect the advertisement revenue to jump back to pre-Covid levels.

It said it would want to know the occupancy level at which the company thinks that it becomes confident that a location is now ready to go for a slightly higher level of pricing. Besides, since a lot of the movies past three months have fared well below expectations, it said one would like to know what is company doing proactively to address the situation.

The stock fell 4.12 per cent to hit a low of Rs 1,404 on BSE.

"Revenue and Ebitda were ahead of our estimates; PVR Inox reported a loss of Rs 330 crore. ATP/SPH stood at Rs 239/Rs 119. Footfalls stood at 3.05 crore in Q4FY23. It plans to open 150 to 175 more screens in FY24. The company plans to shut down approximately 50 cinema screens and has charged depreciation of Rs 10.58 crore towards the same in Q4FY23. With improving line-up of Hindi movies and a strong pipeline for the overall cinema industry (across languages) in FY24, we reiterate our positive stance on multiplexes over medium/long term," the brokerage said while suggesting a target of Rs 2,125.

Underperformance in movies led to lower occupancy and margins, said Motilal Oswal Securities. It noted that PVR Inox has only provided merged company financials. It noted that the combined entity’s occupancy declined 290 bps YoY to 22.2 per cent against 25.1 per cent in the year-ago quarter. It estimated a 70 per cent YoY decline in pre Ind-AS Ebitda with 5.1 per cent margin.

"The quarter witnessed a soaring start with 'Pathaan' in January and the continued impressive performance of 'Avatar', which was released in December. However, February and March saw a dip in admissions due to lacklustre performances of Hindi films. Hollywood releases, ‘John Wick’, ‘Antman’, ‘Shazam 2’ and ‘Creed III’ delivered decent performances at the Box Office," the brokerage noted. 

PVR Inox, Motilal Oswal said, expects to achieve operational synergies of Rs 220 crore over the next 12-24 months.

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