Box office collection impact on PVR share price: Big Bollywood movies fail to make mark

by admin
Box office collection impact on PVR share price: Big Bollywood movies fail to make mark
Box office collection impact on PVR share price: Big Bollywood movies fail to make mark

[ad_1]

Kotak Securities downgrades PVR

Photo : PTI

Kotak Securities has downgraded the PVR stock and has trimmed the target price to Rs 1850 per share. The company has cut the FY23 – 24 EBITDA (a measure of core corporate profitability) by 15-38%.. The company has cut the FY23 – 24 EBITDA (a measure of core corporate profitability) by 15-38%.

This news comes in the backdrop of the recent Mumbai NCLT nod for the merging of INOX and PVR. The National Company Law Tribunal (NCLT) approval to the INOX-PVR merger is expected to create a multiplex behemoth – the merged entity will have a strong bargaining power, there will be better negotiation, better theatrical windows, it is a big positive to capex discipline which will aid cash flows, it will improve the entity’s balance sheet strength and help to redefine the industry dynamics.
However, the downgrade seems to focus on the emerging trend in the Hindi multiplex business as it suffers from a content slump. There has been an unabated weakness when it comes to the Bollywood net box office collection.

The data suggests that there has been a structural change in consumer behaviour – they seem to have a very low threshold to tolerate bad content, even movies helmed by big banners have flopped when they failed to impress the audience.

However, there is hope that Bollywood will churn up better content in the near future but to draw audiences to theatres and match the pre-pandemic level will yet be an uphill task.

Meanwhile, theatres are also facing competition from OTT, which is raising the bar for content. Audiences are diverted to OTT for good content from the comfort of their homes.

Kotak Securities has downgraded PVR because it has said that the PVR INOX occupancy for the last 9 months is at about 26% as against the normalised occupancy of 32% pre-pandemic.

Gping forward, the company said that there will be a drop of occupancy impact on EBITDA margins by about a 150 bps and in EBITDA by about 8-10%. It has trimmed the FY24 occupancy of the merged entity by 29% and the EBITDA by 15%.



[ad_2]

Source link

You may also like