Media & Entertainment – Jul-Sep’25 Earnings Preview – Cinemas glitter but parks jitter

Media: Industry-wide BO collections increased by 20.2% YoY to ~Rs31.7bn in 2QFY26E, primarily driven by titles like Saiyaara, Coolie, Mahavatar Narsimha, and War 2. Post COVID, this has been the third instance wherein industry-wide BO collections have surpassed ~Rs30bn mark led by strong performance from Bollywood and Hollywood movies. Accordingly, we expect PVRINOX IN’s footfalls to increase 13.5% YoY to 44.0mn with a pre-IND AS EBITDA margin of 15.4% in 2QFY26E. As for broadcasting, Z IN’s performance is likely to be weighed down by weak advertising environment while EBITDA margin is set to collapse to a single-digit mark of 6.0% due to higher content cost and A&P expenses amid launch of two new channels. Entertainment: While headwinds in Kiddopia persist, consolidation of Curve Games, Fusebox, and Smaash is likely to support the growth trajectory for NAZARA IN. As for IMAGICAA IN, we expect footfalls to remain flat YoY to 0.25mn in a seasonally weak quarter with an EBITDA loss of Rs60mn. Top pick: While Z IN is likely to report weak performance due to higher content cost and A&P spends amid launch of two new channels, EBITDA losses in ZEE5 are likely to decline by ~40-50%. With launch of new content, improvement in viewership share and re-entry of ZEE Anmol into the FTA category, we expect back-ended recovery in ad-revenues and margin trajectory. We maintain BUY with a TP of Rs161 (14x FY27E EPS).