Home / Money / PVR likely to see strong footfalls with 'Pathaan' release but Q4 overall may remain muted: Nuvama Wealth

After a blockbuster Q3FY23 (October-December) for PVR Ltd, seasonally weak Q4FY23 (January-March) is likely to see strong start from movie ‘Pathaan’, believes Nuvama Wealth Management Ltd.

Post pandemic, the Hindi movie 'Pathaan' is already seen in the top three for advance bookings, as per the brokerage report.

There is a pent-up demand for the movie, which is being released on Wednesday, January 25, as it features the well-known Bollywood star Shah Rukh Khan after four years. The movie will start screening from 6 am in many screens across regular and premium formats.

Nuvama Wealth Management believes that the movie would run for a lengthy five days throughout the first week.

"Strong numbers for ‘Pathaan’ is a welcome sign for the Bollywood industry. We expect robust earnings for ‘Pathaan’ ( 350-400 million on first day, 1.5-2.0 billion India collections in first week). This again proves people would want to watch a big entertainer on the big screen," said the brokerage in its report.

Additionally, the fact that multinational OTTs reduced their spending by 30 percent this year is positive for PVR in terms of competitive intensity.

The brokerage claims that if there isn't a significant social media uproar or political backlash, negative publicity may also increase footfall. Strong attention was generated by the controversies around the song 'Besharam Rang' and the differentiated promotions.

However, going ahead given that it is exam season in February and March, footfall for the balance part of Q4FY23, which includes 'Selfiee', 'Shehzada', and 'Maidaan', may be a little difficult.

Last week, the film exhibition company, reported a consolidated net profit of 16.15 crore for the third quarter ended December. When compared to the same period last year, its consolidated operating revenue for October-December increased 53.17 percent, from 614.15 crore to 940.69 crore.

"The quarter witnessed a sharp bounce back from the previous quarter on the back of strong content performance. The same was reflected in the growth of key operating metrics like Admits, ATP (average Ticket Price) and SPH (Spending per head)," said the company in an exchange filing.

With only few formalities left for the merger with Inox, improving dynamics for Hindi movies and likely strong pipeline for Hollywood in calendar year (CY) 2023, the brokerage continues to remain positive on multiplexes on a long-term basis.

"PVR stock is in oversold territory (down 30% plus from peak), and we retain 'buy' rating," said the brokerage.

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