Aniket PujariIndian stock market: Shares of PVR Inox, the country’s largest multiplex operator, have been under sustained selling pressure from Dalal Street investors, causing the stock to close in the red each passing month and tumble to levels not seen in recent years.
The stock has ended the last four months in the red, losing 45% of its value. This crash has also led to a 60% correction from its peak of ₹2,214, which it attained in August 2022. In late February, the stock slipped to June 2020 levels.
The sharp correction in company shares, formed by the merger of PVR and Inox labels, can be attributed to weaker-than-expected financial performance in recent quarters. In 2024, the Indian film industry faced multiple headwinds, including the Hollywood strike in 2023, which delayed the release of many English films, and the absence of major Bollywood releases from megastars.
Additionally, the general elections and the T20 World Cup disrupted the movie calendar, all leading to a drop in the country’s box office collection (BOC). These challenges, coupled with the broader market correction and PVR Inox’s exclusion from the F&O segment, have further fueled the sharp decline in its stock price.
Tailwinds are now emerging
After a year of muted releases and underwhelming movie performances, 2025 has started on a strong note, with gross box office collections reaching ₹20 billion in the first two months, according to domestic brokerage firm JM Financial.
Sankranthi Vasthunam, Sky Force, and Game Changer led collections in January, while in February, Chaava dominated with approximately ₹5 billion collected in the first 15 days post-release.
Moreover, the return of big-banner movies, an improved pipeline of Hollywood and Bollywood films (where PVR-Inox holds a higher market share), and rising disposable income due to income tax relief are expected to support occupancies, according to the brokerage.
JM Financial finds the current valuation attractive and has retained its ‘Buy’ rating on the stock with a target price of ₹1,610, indicating an upside potential of 72% from its latest closing price.
Another brokerage firm, Kotak Institutional Equities, stated in early March that the recent correction in PVR Inox is overdone and upgraded its rating on the stock to ‘Buy.’ The brokerage attributed the stock’s decline to continued weakness in box office collections but expects Hollywood releases to drive collections in FY26.
Even as the overall content cycle in multiplex chains remains depressed, PVR Inox’s cost optimization and expansion strategies are noteworthy. However, the brokerage has cut its fair value estimate to ₹1,200 from ₹1,300 to account for delays in Bollywood’s recovery.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
