PL Sector Update - Multiplex - Sector Update – Bollywood continues to struggle
Prabhudas Lilladher Pvt Ltd
Multiplex - Jinesh Joshi - Research Analyst, Prabhudas Lilladher Pvt Ltd
Sector Update – Bollywood continues to struggle
The NBOC’s for Bollywood & Hollywood (excluding regional movies) genre declined 14.6% YoY to Rs9.6bn in 1QFY24. Total NBOC’s (including regional movies) stood at ~Rs18.6bn which is broadly in-line with previous quarter. List of movies that crossed Rs1bn barrier in 1QFY24 include:-
§ Kisi Ka Bhai Kisi Ki Jaan
§ PS-2
§ The Kerala Story
§ Fast X
§ Adipurush
Except for The Kerala Story, all other movies were a part of our potential Rs1bn slate taking our strike rate in projecting blockbusters to 80% for the quarter. We have excluded Jawan and Maidaan (part of our potential Rs1bn slate for 1QFY24) in calculating the strike rate as these movies did not release during the quarter (got postponed). Bhola which released on 30th March (spill-over happened in 1QFY24) and netted ~Rs820mn was the only miss from our end. Please note that our strike rate calculation excludes movies that have clocked Rs1bn but were NOT in our projection list. For example, “The Kerala Story” turned out to be a sleeper HIT but was NOT a part of our Rs1bn slate and hence is excluded from the list.
Exhibit 1: Strike rate in projecting the Rs1bn slate count
| Period | Expectation | Actual | Strike rate |
| 3QFY23 | 5 | 2 | 40% |
| 4QFY23* | 3 | 1 | 33% |
| 1QFY24# | 5 | 4 | 80% |
Source: Company, PL *Excluding Bhola; #Including Bhola
Further, NBOC (Bollywood + Hollywood) trend of the past 4 quarters is as follows:-
§ 1QFY23 – Rs11.2bn
§ 2QFY23 – Rs6.9bn
§ 3QFY23 – Rs11.1bn
§ 4QFY23 – Rs9.0bn
Our view: Apart from 5 movies that crossed Rs1bn mark in 1QFY24, there were a lot of fillers (neither a hit nor an outright dud) like Zara Hatke Zara Bachke, Guardians of the Galaxy, Virupaksha, 2018, SpiderMan-Across the Spider Verse and Transformers-Rise of the Beast that have done well aiding overall collections for the quarter. However, Bollywood underperformance continues to remain a cause of concern as NBOC for the genre was down 20% QoQ and 28% YoY (includes dubbed Hindi movies). Nonetheless, Bollywood pipeline for 2QFY24E looks decent (see schedule below) indicating performance improvement is on the cards.
Exhibit 2: Notable Bollywood releases in 2QFY24E
| Movie | Release Date |
| Rocky Aur Rani Ki Prem Kahani | 28th July |
| Gadar-2 | 11th Aug |
| Oh My God-2 | 11th Aug* |
| Dream Girl-2 | 25th Aug |
| Jawan | 07th Sep |
Source: Cmompany, PL *Can get postponed to avoid clash with Gadar-2
We believe Bollywood recovery is critical for re-rating of PVR-Inox as the genre constituted 51% of BO collections (including Hindi dubbed) for the multiplex major in FY23. Given decent Bollywood pipeline we are hopeful of a recovery in 2QFY24E. Retain BUY with a TP of Rs1,879.
PVR Inox (PVRINOX IN)
Rating: BUY | CMP: Rs1,376 | TP: Rs1,879
Key Financials - Consolidated
| Y/e Mar | FY22 | FY23 | FY24E | FY25E |
| Sales (Rs. m) | 13,310 | 37,507 | 68,567 | 78,370 |
| EBITDA (Rs. m) | 1,057 | 10,477 | 23,014 | 27,010 |
| Margin (%) | 7.9 | 27.9 | 33.6 | 34.5 |
| PAT (Rs. m) | -4,882 | -3,243 | 4,045 | 6,682 |
| EPS (Rs.) | -80.1 | -33.1 | 41.3 | 68.3 |
| Gr. (%) | NA | NA | NA | 65.2 |
| DPS (Rs.) | - | - | 2.5 | 2.5 |
| Yield (%) | - | - | 0.2 | 0.2 |
| RoE (%) | NA | NA | 5.2 | 8 |
| RoCE (%) | NA | 2 | 7.7 | 9.8 |
| EV/Sales (x) | 9.8 | 5.6 | 3.1 | 2.7 |
| EV/EBITDA (x) | 122.8 | 20.2 | 9.3 | 7.8 |
| PE (x) | NA | NA | 33.3 | 20.2 |
| P/BV (x) | 6.1 | 1.8 | 1.7 | 1.6 |