PVR Inox Share Price Target at Rs 1,500: ICICI Securities
ICICI Securities has reiterated a BUY rating on PVR Inox with a robust 12-month target price of Rs1,500, reflecting a bullish stance on India’s multiplex leader. The first quarter of FY26 marked a decisive turnaround for the company as it delivered sharp revenue gains and controlled costs, narrowing quarterly losses and energizing investor sentiment. With footfalls at a multi-quarter high, advertising rebounding, and new operational strategies in place, PVR Inox enters FY26 with a fortified balance sheet and new growth levers—despite persistent industry headwinds. Below is a detailed breakdown of why this stock is getting the Street’s attention.
Q1FY26: Stellar Recovery Across Metrics
Revenue Surges on Blockbusters and Initiatives
PVR Inox posted a 23.4% year-on-year and 17.5% quarter-on-quarter revenue increase, propelled by successful Bollywood and Hollywood releases. Promotions like Blockbuster Tuesday and food & beverage (F&B) combo offers bolstered box office sales and ancillary revenue streams.
Admissions and Elevated Consumer Engagement
Cinema admissions grew 11.8% YoY to 34 million, marking the highest footfalls in 18 months. Management remains upbeat on exceeding the impressive FY24 footfall benchmark of 150 million, riding on a strong content pipeline for the coming quarters.
Profit Margins & Cost Management in Focus
EBITDA Margin Turns Positive, Net Loss Narrows Sharply
EBITDA margin flipped to 6.5% in Q1FY26 from -3.2% in the prior-year quarter—a direct result of stringent cost controls and operational efficiency. Net loss narrowed to Rs545 million, a substantial improvement from the previous year, driven by higher margins in ticketing, F&B, and ad revenues, as well as proactive expense management.
Breakdown of Key Financials (Q1FY26)
| Metric | Q1FY25 | Q4FY25 | Q1FY26 | QoQ Growth (%) | YoY Growth (%) |
|---|---|---|---|---|---|
| Revenue (Rs mn) | 11,907 | 12,498 | 14,691 | 17.5 | 23.4 |
| EBITDA Margin (%) | -3.2 | -0.8 | 6.5 | NA | NA |
| Net Loss (Rs mn) | -1,790 | -1,253 | -545 | -56.5 | -70 |
| ATP (Rs) | 235 | 258 | 254 | -1.6 | 8.1 |
| F&B Spend per Head (Rs) | 134 | 125 | 148 | 18.4 | 10.4 |
| Ad Revenue (Rs mn) | 1,096 | 964 | 1,096 | 13.9 | 17.3 |
Footfall Drivers and New Screen Additions
Promotions Boost Under-Tapped Segments
Tactics like the Rs99 Tuesday offer attracted nearly 1 million incremental visitors from cohorts such as students and seniors. However, management is wary of margin pressures and does not plan to extend the offer to additional weekdays.
Screen Expansion—Asset-Light Strategy Accelerates
Twenty screens were added in Q1, with a shift towards 14 asset-light or FOCO (Franchise-Owned, Company-Operated) formats. With 127 more screens signed for launch in FY26–27, this model enhances returns by reducing upfront capital outlay.
Strategic & Operational Updates
Ad Revenue and Ancillary Gains
Ad revenues returned to pre-pandemic levels, up 17.3% YoY in Q1FY26, led by improving advertiser sentiment on the back of sustained audience growth and premium cinematic experiences. F&B promotions also resulted in higher per-head spending, driving the segment’s margin expansion.
Capital Expenditure and Cost Rationalization
FY26 capex guidance is maintained at Rs4–4.3 billion, fundamentally allocated to new screens and select renovations, with a clear intent to shift towards efficient, asset-light models.
Rental and Fixed Cost Negotiations
Management renegotiated rental escalation clauses to contain fixed costs—an important lever for profitability given that rentals remain the largest fixed expense.
Looking Ahead: Content Pipeline and Risks
Robust Movie Slate to Catalyze Growth
Q2 and Q3FY26 will see releases like War 2, Jolly LLB 3, Zootopia 2, Avatar: Fire and Ash, and regional blockbusters—expected to underpin further revenue and footfall increases.
Risks & Caveats
Execution risks include underperformance in upcoming big-budget movies and unrealized merger synergies. The Karnataka ticket price cap and regulatory uncertainties remain watch items, but management currently sees no impact on screen rollout plans or partner buy-in.
Levels to Watch: Fair Value and Targets
Investment Levels & Target Price
ICICI Securities sets a BUY rating with a target of Rs1,500, implying a potential 45% upside from the current market price of Rs1,036. Key financial ratios to note:
| Metric | FY26E | FY27E | FY28E |
|---|---|---|---|
| EPS (Rs) | 9.2 | 39.5 | 52.9 |
| P/E (x) | 112.3 | 26.2 | 19.6 |
| EV/EBITDA (x) | 21.1 | 4.1 | 3.1 |
| ROE (%) | 1.3 | 5.2 | 6.4 |
Shareholder and Trading Levels
As of June 2025, promoters held 27.5% while institutions owned 56.2%, with robust free float and liquidity. Over the past 12 months, the stock is down 26.4%, offering an attractive entry for recovery believers.
Bottomline for Investors: Why the Street Is Watching
ICICI Securities’ reiteration of a BUY call captures PVR Inox’s turnaround underpinned by revenue ramp-up, new efficiency measures, and a compelling screen expansion strategy. As macro trends turn, and with footfalls at multi-year highs and industry-wide recovery in progress, the stock stands out. Investors should monitor the Rs1,036 and Rs1,085 levels as pivotal support and resistance, respectively, and keep eyes on merger synergies and regulatory clarity for further re-rating.
