On Wednesday, CLSA, a brokerage firm, increased the price target for PVR (NS:PVRL) Inox Ltd (PVRINOX:IN) to INR2,450.00 from INR2,420.00 while maintaining an Outperform (2) rating. The adjustment follows PVR Inox's reported second-quarter financial year 2025 (2QFY25) revenue of INR 16 billion, which is up 36% quarter-over-quarter and down 19% year-over-year, surpassing CLSA's projections.
The company's performance was bolstered by a significant rise in admissions, with 39 million patrons marking a 28% increase from the previous quarter. Additionally, sales of movie tickets soared by 41% quarter-over-quarter. Earnings before interest, taxes, depreciation, and amortization (Ebitda) reached INR 4.8 billion, an impressive 91% increase from the prior quarter, also exceeding expectations.
Despite a strong quarter, CLSA has revised its revenue and Ebitda forecasts for PVR Inox for the fiscal years 2025 to 2027, reducing estimates by 4%-9%. However, the firm still anticipates compound annual growth rates (Cagrs) of 12%-17% for revenue and Ebitda during this period. The report highlighted the company's continued expansion, noting PVR Inox's addition of 66 new screens in the first half of the year, bringing its total to 1,745 screens.
The CLSA analyst commented on the company's prospects, stating, "Even as India box office collections had a big rebound, mirroring strong audience turnout, with PVR Inox's drag of 1QFY25 and margin miss in 2QFY25, we cut FY25-27 revenue/Ebitda estimates 4%-9% but still forecast 12%-17% revenue/Ebitda Cagrs."
The analyst also emphasized the favorable long-term risk-reward profile of PVR Inox, leading to the decision to retain the Outperform rating and increase the price target as they roll forward the valuation.
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