Buy PVR; target of Rs 2065: Sharekhan

Sharekhan's research report on PVR

PVR reported weak numbers for 2QFY23 on the back of weak performance of Big Budget Bollywood movies. Consequently, Occupancy and admits suffered falling by 1380 bps and 40% with respect to pre-pandemic levels and by 960 bps and 28% on q-o-q basis. The weak performance was in line with subdued content for Q2FY23. However, for Q3FY23 the management is optimistic of achieving a robust performance on account of the decent and diverse content pipeline for Q3FY23. The Management indicated that it is on track to achieve the target of 110-125 screen additions by FY23. Further, the Management expects that they would see the recovery of ATP to Rs 250 and SPH of Rs 135-140 given the strong content pipeline for Q3FY23.

Outlook

We maintain a Buy on PVR with a revised PT of Rs. 2,065, on the back of decent 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.

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