SYNOPSIS: Kotak reiterated its “buy” call on PVR Inox, citing strong occupancy trends, stable box office collections, improving cash flows, and a robust Q4 movie pipeline, while viewing the recent stock correction as overdone.
During Monday’s trading session, shares of India’s largest and most premium film exhibition company are in focus on the stock exchanges, after receiving a bullish initiation by Kotak Securities, as occupancy trends stay strong and see a potential upside of 34 percent.
With a market cap of Rs. 10,188 crores, shares of PVR Inox Limited closed in the green at Rs. 1,037.5 on BSE, up by around 1 percent, compared to its previous closing price of Rs. 1,030.6. The stock has delivered negative returns of around 17 percent in one year, and has fallen by nearly 5 percent in the last one month.
Brokerage Target & Outlook
Kotak Securities has reiterated its coverage on PVR Inox Limited with a “buy” rating and maintained an unchanged target price of Rs. 1,380 per share, implying a potential upside of around 34 percent from its previous close. The brokerage values the company at 12.5x December 2027E EV/EBITDA.
Kotak expects Q3 FY26 to mark the second consecutive quarter with occupancy above 27 percent, alongside mid-teen EBITDA margins. It noted that industry gross box office collections (GBOC) in the third quarter will broadly be in line with Q2, despite the underperformance of Avatar relative to expectations.
Looking ahead, the brokerage believes the Q4 FY26 movie pipeline appears strong, which could present an upside risk to its FY26 EBITDA estimates. Kotak also views the recent correction in the stock as
“overdone” and forecasts earnings growth of 122.4 percent in FY27E and 26.4 percent in FY28E.
Maintaining a positive outlook, Kotak highlighted improving cinema-going trends and steady free cash flow (FCF) generation, supported by a capital-light expansion strategy. It reiterated that industry collections in Q3 remained stable compared to Q2, even with the weaker-than-expected performance of select releases like Avatar.
The brokerage expects PVR Inox to deliver another quarter of strong occupancy and healthy margins, while the Q4 FY26 content slate, led by Bollywood and regional films, further strengthens the medium-term outlook.
Financials & More:
PVR INOX Limited is engaged in the business of movie exhibition & production and operates the largest cinema network across India. It earns revenue from the sale of movie tickets, in-cinema advertisements/product displays, the sale of food and beverages, and the restaurant business.
PVR Inox reported a marginal growth in revenue from operations, experiencing a year-on-year increase of over 12 percent, from Rs. 1,622 crores in Q2 FY25 to Rs. 1,823 crores in Q2 FY26. The company also returned to profitability, posting a net profit of Rs. 106 crore compared with a net loss of Rs. 12 crore in the same period last year.
Strong operating cash flows and a lower capex intensity supported healthy free cash generation, enabling meaningful debt reduction. As of 30th September 2025, PVR Inox’s net debt stood at Rs. 618.8 crore, the lowest level since the merger, down Rs. 333.4 crore from 31st March 2025 and Rs. 811.6 crore (or 57 percent) compared with levels at the time of the merger.
With a strong release slate and continued consumer interest in theatrical experiences, the company remains optimistic about its performance for the remainder of FY26. PVR Inox expects the upcoming quarters to feature a diverse and high-quality content pipeline across languages, which is likely to support healthy footfalls and sustain revenue momentum.
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