Pushpa 2: The Rule: The Allu Arjun-Rashmika Mandanna starrer movie has broken all the records in the history of the Indian film industry. In just three days of its release, Pushpa 2: The Rule has already crossed Rs 500 crore box office collection club, becoming the fastest film to achieve in Indian cinema. Not only that Pushpa 2 has also outperformed expert estimates. Amidst the record-breaking success of Pushpa 2, there is one multiplex stock that is going to win big. Who? It is none other than PVR-INOX that holds about 50-60% market share in the multiplexes segment of India.
Pushpa 2: The Rule Box Office Collection:
The Indian Telegu-language movie Puspha 2 hit the Indian multiplexes on December 5, 2024. Directed by Sukumar and produced by Mythri Movie Makers, it is a sequel to Pusha: The Rise, which was released in 2021.
With the similar storyline that revolves around the smuggling of Red Sandalwood, Pushpa, is played by Allu Arjun. The South Indian megastar is paired with Rashmika Mandanna, who is playing the role of his wife Srivalli. Pushpa's setback in the movie would be IPS officer SP Bhanwar Singh Shekhawat, played by Fahadh Faasil. After being humiliated by Pushpa in the first movie, Shekhawat vowed to take revenge and destroy Pushpa.
On Day 1, the movie surpassed the box office collections of RRR and Baahubali to bag a whopping Rs 282.91 crore. Although there was a slight dip in numbers on Day 2, Pushpa 2 managed to breach the Rs 400 crore mark. By Day 3, Puspha 2 bagged a Rs 115 crore collection, becoming the fastest movie to break the Rs 500 crore collection record in India. These figures are from its worldwide collection.
Puspha 2 has already earned more than its budget of around Rs 400-500 crore.
Multiplex Stock:
Data from Elara Securities revealed that footfalls during November have been muted, with an occupancy rate of around 25%. October occupancy was particularly low, falling below 20%. However, December is set to be one of the best months for cinema chains, driven by strong movie releases. Pushpa 2 is likely to achieve more than 40%+ occupancy, with overall Q3FY25 occupancy set at 29-32%.
The brokerage also believes that Pushpa 2 would provide a boost to the industry's adv revenue which was muted in the October - November period.
Pushpa 2 has already become the highest-grossing movie and Elara believes that it could bag an estimated Rs 500 crore net Hindi box office collection.
Amidst this, on multiplexes, Elara said, PVR-Inox holds a 50-60% market share within the multiplex segment. The distributor's share remains stable at 45%.
It added, "In Cinemas, PVR-Inox is expanding its screen count at Hyderabad, further enhancing mall entertainment experience. This categorization highlights the dynamic and evolving nature of mall-based retail and the competitive pressures driving innovation and expansion."
After its Q2 results, brokerage JM Financial stated that PVR Inox's 2Q performance underscored cinema's enduring appeal, again. Movies across languages, genres and budgets did well. Re-runs alone pulled in over 2mn patrons. Still, occupancies, at 25.7%, remain uncomfortably low. Management attributes this to a lower quantity of film releases. Admits/movie has reached pre-COVID levels already, per the management. Producers have a grip on the quality too. With productions getting on track, quantity, and hence distribution of releases, should correct too. That bodes well for FY26.
JM's note also said, Be that as it may, 2HFY25 already checks both quantity and quality boxes. Pushpaa-2 in Q3 and Sitare Zameen Par in Q4 promise a steady flow of box office riches. Three back-to-back quarters of strong box office performances (Q1-Q4FY25) should instil confidence in investors. Moreover, improved cost structure means better top-line will flow down to margins fairly quickly.
On the valuation, JM's note said, "The company continues to emphasise capital efficiency. It expects 50-60% of new screen additions in the asset-light/FOCO model. While the impact on the current capital base might be limited to start with, it should gradually improve ROCEs and cash flows, thereby helping multiples. We have tweaked assumptions, driving limited cuts to revenue estimates. EPS cuts are higher, largely on full tax rate assumption now (from an earlier view of tax offset due to prior losses). That however has limited impact on our DCF-based TP, which is down c.3% to INR 1,980 (from INR 2,040). Current levels offer good entry points. BUY."
Also, ICICI Securities in its note said, We believe capex intensity may also reduce as a proportion of revenue from FY26 as PVR plans to open 15% screens on FOCO model, 35-50% on the asset-light model and rest on a structured lease model. Net debt declined by INR 1.4bn in H1FY25. The monetisation of assets is also on track and may help in deleveraging further. Re-iterate BUY." The target price set by this brokerage is about Rs 2,250.
That being said, there is a potential of at least a 45% upside in PVR Inox ahead.
PVR Inox Share Price:
After the market hours of December 6, PVR Inox's share price ended at Rs 1548.30 apiece, with a market cap of Rs 15,204.30 crore. In six months, PVR Inox shares have recovered to gains of over 15% on BSE.
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