On Tuesday, UBS reaffirmed its confidence in PVR Inox Ltd (PVRINOX:IN), with a price target increase to INR 2,000 from the previous INR 1,950, while maintaining a Buy rating on the stock. The firm's outlook is based on expectations that the company will outperform consensus forecasts for the third and fourth quarters of the financial year 2025.
UBS predicts that for PVR Inox to surpass the third-quarter consensus estimates, the upcoming film "Pushpa 2" would need to achieve a gross box office collection of INR 8-8.5 billion. However, UBS's projections are more optimistic, with an anticipated box office collection of INR 10 billion. The opening day revenue is expected to fall between INR 1.5-2 billion.
With the film's release imminent, advance bookings have already reached INR 0.8-1 billion in under two days, and are forecasted to exceed INR 1.5 billion before the film hits theaters.
The analyst highlighted the broad appeal of "Pushpa 2" among Hindi-speaking audiences, which is expected to contribute significantly to PVR Inox's revenue share. This is in contrast to other regional movies that typically have a more localized audience.
The success of other films, such as "Baby John" and "Mufasa," is also seen as a supporting factor for the company's third-quarter revenue and EBITDA estimates of INR 21 billion and INR 7 billion, respectively. These figures are positioned above the consensus.
Looking ahead, PVR Inox is expected to benefit from a strong lineup of regional and Bollywood movies scheduled for release during popular holiday periods. The mid-January holidays, including Pongal and Sakranti, followed by Eid in March, are anticipated to drive significant foot traffic, contributing positively to the company's performance in the fourth quarter.
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