Chhaava, a historical action film starring Vicky Kaushal, has raked in more than ₹500 crore at the box office but its success has not rubbed off on multiplex operator PVR Inox Ltd’s stock, which hit a new 52-week low of ₹866.30 on 28 February.
Other releases in January and February were Game Changer, Sky Force, Sankranthiki Vasthunam, Daaku Maharaj, Vidaamuyarchi and Captain America: Brave New World. But the content pipeline for March is subdued, hurting earnings visibility for the March quarter (Q4FY25). Salman Khan’s Sikandar will release on 28 March, so collections will spill over to Q1FY26.
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“As March appears to be a challenging month, industry-wide net box office collections (NBOC) for the quarter (Q4FY25E) may not be materially different than reported quarter-to-date collection figures of around ₹1,765 crore,” said Jinesh Joshi, an analyst at PL Capital. “Even if we assume miscellaneous collections of around ₹200 crore for the next 20 days in March, industry-wide NBOC for the quarter would be around ₹1,965 crore. Historically, whenever industry-wide collections have been in the range of Rs1,800-1,900 crore, PVR-Inox has struggled for profitability, he added.
Asset-light expansion
Given this, PVR Inox’s tight cost control and expansions via an asset-light model offer limited relief. In the Q3FY25 earnings call, management said it has signed 100 screens under the new capital-light growth model. Of these, 31 screens are under the management contract model and 69 under the asset-light model, in which the developer contributes 40-80% of the capital expenditure. Management expects these screens to come up over the next two-three years.
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In a strategic move, PVR has also been re-releasing old movies to recover fixed costs and buoy footfalls during lean periods. Re-releases contribute more than 4% to the total footfall, management said in the Q3 call.
However, the inconsistent performance of Bollywood movies is particularly worrying. “The issues plaguing the Bollywood industry seem to be somewhat structural in nature, but we do see some improvement in the movie pipeline,” said a Kotak Institutional Equities report dated 6 March. It has cut its FY26-27 Ebitda estimates by another 3-13%, largely due to a delay in Bollywood’s recovery, and revised its fair value from ₹1,330 to ₹1,200. The stock has gained 10% from its lows to about ₹951, and further recovery hinges mainly on the trajectory in Bollywood movies.
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