Motilal Oswal recommended Neutral rating on PVR Inox with a target price of Rs 1180 in its research report dated August 07, 2025.
Brokerage firm Motilal Oswal has maintained its Neutral stance on PVR Inox, assigning a target price (TP) of ₹1,180 in its latest research report dated August 7, 2025. The recommendation comes after the multiplex chain delivered a strong performance in the first quarter of FY26, driven by rising footfalls, improved Bollywood content, and a revival in Hollywood box office collections.
Motilal Oswal’s research report on PVR Inox
Strong Q1 FY26 Performance
According to the report, PVR Inox recorded a 12% year-on-year increase in footfalls during the quarter. This growth was supported by a strong slate of Bollywood films and a healthy recovery in Hollywood releases, both of which contributed to higher audience turnout across its theaters.
The company’s Average Ticket Price (ATP) climbed 8% YoY, while Spend Per Head (SPH) — a key indicator of food and beverage revenue — rose 10% YoY to reach an all-time high. These factors combined to deliver a 23% YoY surge in overall revenue.
Cost Discipline and Profitability
Motilal Oswal highlighted that cost control measures played a crucial role in the company’s outperformance. Fixed costs increased by only about 3% YoY, thanks to initiatives aimed at making expenses more variable and closely aligned with revenue trends.
This efficiency translated into a pre-Ind-AS EBITDA of ₹953 million — a 24% beat compared to estimates — with margins expanding by 6.5%, representing a 115 basis points improvement.
Revised Estimates and Outlook
Given the improved cost management, Motilal Oswal has revised its FY26–FY27 EBITDA estimates upward by around 1–3%. However, the brokerage has chosen to maintain its Neutral rating, basing the ₹1,180 TP on a valuation of 12.5x pre-Ind-AS 116 September 2027E EBITDA.
This stance reflects a balanced view: while operational performance and profitability have improved, the brokerage sees limited upside potential from current price levels in the near term.
Industry Context
The recovery in cinema exhibition has been gaining momentum over the past year, supported by better movie lineups, increased consumer spending, and the fading impact of COVID-19 disruptions. The resurgence of big-ticket Bollywood productions, coupled with Hollywood’s improved output after prior delays, has bolstered occupancy rates for multiplex operators like PVR Inox.
However, competition from OTT platforms and the volatility of box office performance remain important factors for investors to watch. Sustained growth in ATP and SPH will be key for maintaining revenue momentum in the face of these challenges.
Investor Takeaway
Motilal Oswal’s latest assessment suggests that PVR Inox is executing well on both the revenue and cost fronts, delivering stronger-than-expected profitability in the latest quarter. The rise in footfalls and customer spending indicates that the multiplex experience continues to hold appeal, even as digital entertainment options expand.
That said, with the current valuation already factoring in much of the recent improvement, the brokerage’s Neutral rating signals that further significant gains in the stock price could require additional catalysts, such as blockbuster film releases or further expansion into new markets.
Disclaimer: The views and investment tips expressed by investment experts, broking houses, or rating agencies are their own and do not represent those of this publication. Readers are advised to consult certified financial advisors before making any investment decisions.
