PVRInox Needs Prabhas' Kalki To Work After Weak Start To FY25, Says Nuvama

Nuvama Institutional Equities sees better footfalls for PVRInox due to a better content lineup including Kalki and a slew of Hollywood releases in the year after a weak start in April and May.

What Happened: According to the research firm, Kalki 2898 AD which features Prabhas, Amitabh Bachchan and Deepika Padukone is expected to make a blockbuster debut on June 27 weekend with a ₹100 crore opening day gross collection in India. The film also got $2.6 million (around ₹21.60 crores) in pre-sales in the U.S. Domestic advanced booking for the film is also promising with tickets worth ₹6.8 crore already sold. 

The brokerage also said the Hollywood pipeline is expected to be better in FY25 after writers strike settlement. Deadpool & Wolverine starring Ryan Reynolds and Hugh Jackman is ready for July release and Transformers One starring Chris Hemsworth and Scarlett Johansson is scheduled to come out in September. 

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The company had a challenging Q1FY25 (April-June period) due to heatwaves, elections and cricket, Nuvama said. The multiplex operator had announced a strategic partnership with Star Sports to broadcast ICC Men's T20 World Cup 2024  live at over 121 cinemas across 45 cities in India after witnessing cricket's impact during the IPL season. 

The company's ad revenue increased 18% year on year to ₹1,958.4 crore in FY24. IPG Mediabrands Magna Global Advertisement forecasts the Indian Advertisement market to grow at 11.8% in 2024 to ₹1.22 lakh crore due to improving macros and consumption. Nuvama expects this growth to benefit cinema advertisement as well with 30–35% of ad revenues coming from long-term deals with advertisers from PVRInox. Nuvama maintained its "buy" call with a target price of ₹1,995.

Price Action: On Tuesday morning, shares of PVR Inox rose 1.10% to ₹1,436.80.

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