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PVR-Inox Q3 results review – A Modest Performance

In a quarter marred by paucity of content due to cricket world cup, PVR-Inox Ldt.’s reported modest performance with footfalls of 36.5 million (our estimate: 36.3 million) and pre-IND AS Ebitda margin of 13.1% (our estimate: 11.1%).

Though ad revenue has shown signs of recovery volatility may persist unless occupancy stabilizes as 60- 65% of the business is on spot deals. To address concerns surrounding occupancy, PVR-Inox is likely to launch a pan-India subscription plan soon. Nonetheless, we expect footfalls to remain a bit soft in the near term as a content pipeline for Q4 FY24 does not inspire much confidence. We cut our Ebitda estimates by 1-4% over the next two years and expect footfalls of 168 million/181 million with pre-IND AS EBITDA margin of 16.8%/17.8% for FY25E/FY26E respectively.

Retain ‘Accumulate’ on the stock with a target price of Rs 1,719 (earlier Rs 1,923) as we cut our target enterprise value/EBITDA to 13 times (earlier 14 times) amid rising volatility in flow, acceptance and predictability of content. NDTV Profit

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