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PVR Ltd.’s Q2 FY23 adjusted Ebitda loss was at Rs 22 million attributable to weak content, particularly from Bollywood, and limited release of Hollywood movies though domestic regional content continued to outperform.
Average ticket price and spends per head dipped QoQ partly due to discounts on National Cinema Day, without which the growth from FY20 baseline would be healthy.
Admits were hurt due to lacklustre performance of Bollywood tentpole cinemas though the start of Q3 FY23 has been encouraging. Gross profit margins were low, which we believe is transitory.
PVR is incrementally changing its cost structure with rental and employee costs now having variable portions, thus cushioning margin decline during weak quarters.
The merger with Inox Leisure Ltd. is on track and anticipated to consummate in three months. The weak print in Q2 FY23 is transitory in our view and our structural thesis on PVR remains intact.
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