PVR Inox shares extend fall on weak reviews of Adipurush

Shares of PVR Inox continued its losing streak for the second straight session on Monday after Prabhas-Kriti Sanon starrer highly anticipated film, Adipurush, received disappointing reviews from critics and audiences. However, weak reviews haven’t impacted the film’s box office numbers as it has grossly collected over ₹300 crore worldwide during its first weekend.

Made with a massive budget of around ₹500 crore, Adipurush is a mythological tale based on Valmiki's Ramayana, which was released on June 16. The film, which features Prabhas as Raghava, Kriti Sanon as Janaki, and Saif Ali Khan as Ravana, is facing criticism for its dialogues as well as visual effects.

Early today, PVR Inox shares opened at ₹1,443.05, down 0.5% against Friday’s closing price of ₹1,450.45 on the BSE. In the first two hours of trade so far, the stock has fallen as much as 2.4% to ₹1,415.70 level, while the market capitalisation slipped to ₹14,186 crore. In the last two sessions, the counter has lost over 5%, including 3.3% fall on Friday.

At the current price level, PVR Inox shares trade 36% lower than its 52-week high of ₹2,211.55 touched on August 4, 2022. It has risen 6% against its 52-week low of ₹1,336.50 hit on May 17, 2023.

Analysts pin hopes on Adipurush success, which will be critical for PVR-Inox’s fortunes in the first quarter of financial year 2023-24. Domestic brokerage firm Prabhudas Lilladher said in a report that if Adipurush is able to net upwards of ₹500 crore, PVR INOX will report better numbers in June quarter, compared to the March quarter.

“Advance booking trends are encouraging and we believe performance of this film will be critical for PVR-Inox’s fortunes in Q1FY24E. So far, 4 movies have crossed the NBOC barrier of ₹100 crore in 1QFY24E and if Adipurush is able to net upwards of ₹500 crore, we believe PVR-Inox will report a better performance than Q4FY23 (managed pre-IND AS EBITDA breakeven),” Prabhudas Lilladher said in a report.

The brokerage has retained a “Buy” rating on PVR Inox shares, with a target price of ₹1,879, an upside potential of 32% from today’s market price.

Prabhudas Lilladher in its report said even if Adipurush clocks ₹500 crore, net box office collection (NBOC) of top-grossers would be lower than previous quarter.  However, the agency believes June quarter of FY24 can post a better performance than previous quarter as hopes are riding high on Adipurush.

The report noted that Ajay Devgan-starrer Bhola released on March 30 and netted ₹80 crore, which has the spill-over in Q1FY24E. “There are quite a few movies like Zara Hatke Zara Bachke (₹61 crore), Guardians of the Galaxy (₹49.4 crore), Virupaksha (₹64 crore), and Transformers-Rise of the Beast (₹31.2 crore) that have done well aiding collections for the quarter,” it noted.

During the March 2023 quarter, three regional movies were released from South. However, NBOC share of multiplexes for Southern movies is typically lower as that market is dominated by single screens.

Hollywood superhero film Flash, which is based on the DC Comics character, also released on June 16, which is likely to further boost NBOC.

PVR Inox was created after the merger of two leading cinema brands PVR and INOX Leisure, effective from February 6, 2023. The merged entity operated 361 cinemas with 1,689 screens across 115 cities till the end of FY23 in India and Sri Lanka.

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