Bollywood

    How box office hits PVR’s stock price: Bollywood blockbusters don’t stand out

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    Kotak Securities Downgrades PVR

    Kotak Securities Downgrades PVR

    Photo: PTI

    Kotak Securities has downgraded PVR shares and lowered its price target to Rs 1850 per share. The company cut his EBITDA (a measure of core company profitability) by 15-38% in fiscal 2023-24. The company cut his EBITDA (a measure of core company profitability) by 15-38% in FY2023-24.

    The news comes as the recent Mumbai NCLT agreed to merge INOX and PVR. National Company Law Tribunal (NCLT) approval for INOX and PVR merger is expected to create a multiplex giant. The merged entity has strong bargaining power, better bargaining, better theater windows, and a significant positive in capital expenditures. A discipline that supports cash flow can help improve the strength of an entity’s balance sheet and redefine the dynamics of the industry.
    However, the downgrade appears to focus on emerging trends in the Hindi multiplex business as it suffers from a slump in content.

    This data suggests that there has been a structural shift in consumer behavior. Consumers seem to have a very low threshold for accepting bad content. Even movies propped up by big banners failed when they failed to impress their audience.

    However, while Bollywood is expected to churn out better content in the near future, drawing audiences to theaters and meeting pre-pandemic levels is still a daunting task.

    Meanwhile, movie theaters also face competition from OTT, which raises the bar for content. Audiences are directed to her OTT for great content from the comfort of their own home.

    Kotak Securities downgraded PVR as it said PVR INOX occupancy over the past nine months was around 26% compared to a normalized occupancy of 32% pre-pandemic.

    Looking ahead, the company says occupancy will impact EBITDA margins by approximately 150 bps and EBITDA by approximately 8-10%. His 24-year occupancy rate for the combined company was reduced by 29% and EBITDA by 15%.





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