PVR rises on big box-office run, likely to see more gains

Mumbai: Multiplex operator PVR Inox has been an outperformer on the bourses in the past month as the release of several big-ticket and highly awaited films such as Oppenheimer, Gadar 2, Mission Impossible 7, Jailer and OMG 2 over the last few weeks has raised expectations of a revival of the industry’s fortunes. PVR shares have gained 13.4% in the past month as against the near flat performance of the benchmark BSE 500 index in the period. Analysts see further 17-30% gains in the stock from current levels to as much as ₹2,240.

The stock declined 0.7% to ₹1,698 on Tuesday. Earlier this week, PVR surged to ₹1,744 – the highest level in nearly seven months. Cinema exhibitors have had a turbulent ride in the last three-four years on account of a prolonged shutdown due to the Covid-19 pandemic, audiences’ hesitancy to venture into crowded places, a weak content pipeline and dominance of OTT (over-the-top) platforms. “Regional and Hollywood movies were anyway doing well, and now we are seeing Hindi movies do well, so this is a trend reversal,” said Abneesh Roy, executive director at Nuvama Institutional Equities. Roy sees the shares at ₹2,100- ₹2,200 over the next few quarters.

ICICI Securities last week raised its price target on PVR to ₹2,240 citing recovery of movie exhibition business. Jinesh Joshi, research analyst at Prabhudas Lilladher sees the shares rising to as high as ₹2,000.

After two disappointing quarters, directors and producers are making efforts on marketing, which is helping bring back audiences, even if the content is not top-notch, said analysts.

“Festival spends are expected to be very strong this year compared to the last, and even though the March quarter is generally subdued due to examinations, a low base from the previous year will help,” Roy said.

PVR Inox will also be screening select matches from the upcoming Men’s Cricket World Cup, which can help bring in audiences, he said.

In the past three months, the stock has run up 25.9% as against the 4% advance in the BSE 500 index.