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Best ever quarter

We increase our pre-IND AS EBITDA estimates by 5%/8% for FY28E/FY29E as we fine tune our footfall, ATP and SPH assumptions. PVRINOX IN’s operating performance was broadly in-line with pre-IND AS EBITDA margin of 21.2% (PLe 21.1%). However, pre-IND AS PAT was 17% above our estimate led by lower-than-expected depreciation expense of INR2,959mn (PLe INR3,318mn) amid change in useful life of assets and higher-thanexpected other income of INR342mn (PLe INR280mn) aided by exceptional gain of INR70mn arising from provision reversal. Led by healthy FCFF generation, PVRINOX IN has transitioned to a positive net cash position of INR1,407mn, reflecting improvement in BS health. Further, a pivot towards asset-light/FOCO model (74% of screen addition in FY27E is on an capital light route) should preserve cash flows, improve capital efficiency and drive higher RoE/RoCE over time. The stock trades at EV/EBITDA multiple of 9.9x/8.4x over our FY28E/FY29E pre-IND AS EBITDA estimates and has appreciated by 38% since our last upgrade note in Jan-26. Downgrade to “ACCUMULATE” with a TP of INR1,561 (10x Sep-28E EBITDA; no change in target multiple).

Top line increased 17.0% YoY:

Top line increased 17.0% YoY to INR21,051mn (PLe INR20,690mn) led by strong performance across genres (titles like Spider-Man: Brand New Day, The Odyssey, Hanuman Ansh, Mirzapur: The Movie, Awarapan 2, Dhamaal 4, Jana Nayagan, and Toxic crossed INR1bn mark during the quarter). Footfalls increased 4.0% YoY to 46.3mn (PLe 46.0mn) while occupancy stood at 30.4%. In 2QFY27, gross ATP increased 13.7% YoY to INR298 (PLe of INR293) while gross F&B SPH was up 14.2% YoY to INR153 (PLe of INR150).

Pre-Ind AS EBITDA margin at 21.2%:

Reported EBITDA increased 25.2% YoY to INR7,693mn (PLe INR7,578mn) with a margin of 36.5% (PLe 36.6%). Ind-AS adjusted EBITDA increased 44.0% YoY to INR4,473mn (PLe Ind-AS adjusted EBITDA of INR4,356mn) with a margin of 21.2% (PLe 21.1%) as compared to a margin of 17.3% in 2QFY26. Reported profit increased 143.2% YoY to INR2,631mn (PLe INR2,091mn) with a margin of 12.5% as compared to a PAT margin of 6.0% in 2QFY26. Ind-AS adjusted PAT increased 110.9% YoY to INR2,733mn (PLe Ind-AS adjusted PAT INR2,331mn) with a margin of 13.0% as compared to a PAT margin of 7.2% in 2QFY26

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