Buy PVR; target of Rs 2020: Sharekhan

Sharekhan's research report on PVR

PVR reported strong numbers for 3QFY23 on the back of robust performance of films across genres. High ATP/SPH at Rs. 244/133 were up 16%/33% from pre-pandemic levels of Q3FY20. For CY2023, the management is confident of achieving a robust performance due to the release of several films of Bollywood superstars. PVR will open 47 additional screens in Q4FY23 and is on track to open 100-110 screens in FY2023. The management guided that the merged entity would add 150-200 screens per annum. PVR and Inox merger got NCLT’s verbal approval on 12th Jan 2023, and management expects the new shares to trade in 45 days from the verbal order. The effective date of merger is the day PVR files the order with the RoC.

Outlook

We maintain a Buy on PVR with a revised PT of Rs. 2,020, on the back of robust content pipeline, reasonable valuation and the impending merger with INOX which can assist in extending the reach in newer markets and increase cost -optimisation opportunities. At CMP the stock trades at 8.7x/7.7x of FY24E/FY25E EPS.