Could Multiplex Stocks Rally As 4 Movies To Clock Rs 1 Billion

Prabhudas Lilladher in its latest report has said that in 3QFY23, 4 movies (including regional) crossed the Rs1 bn mark and they expect footfalls of PVR/Inox to be 17%/9% lower than comparable pre-COVID base of 3QFY20.

"Now in 4QFY23, Bhola's collection figures will not be reflected (spill over to happen in 1QFY24) and conservatively let's assume out of balance 3 movies, one fails to achieve Rs1bn mark. Thus, there would be at least 2 movies (Bollywood + Hollywood) with Rs1bn of NBOC in 4QFY23. On the other hand, so far, 2 movies from the regional genre namely Varisu and Thunivu have already netted Rs1bn and Rs0.8bn (including today's expected collection) respectively," the brokerage has said,

4 movies to net 1 billion

"Hence, even in 4QFY23, there would be ~4 movies netting above Rs1bn along with a few fillers as highlighted above. Overall, the content pipeline appears decent and we maintain our positive bias on multiplexes and retain BUY on PVR (merged entity TP of Rs2,005 based on 15.5x FY24E EBITDA) and Inox (implied TP of Rs602 based on swap ratio of 3:10). Having received NCLT approval, we expect the merger to go through by end of 4QFY23 which could act as re-rating lever from here on," the brokerage has said.

The firm has a buy on the stock of Inox Leisure for a price target of Rs 602 and a buy call on the stock of PVR with a target of Rs 2005.