PVR-Inox up 3% on heavy volumes, gets ‘buy’ upgrade on healthy outlook

PVR-Inox shares gained 3.6 percent on January afternoon 20 on heavy volumes. The stock of the multiplex chain also got a “buy” upgrade and a higher target price from Elara Securities.

Around 67.98 lakh shares had changed hands on exchanges by afternoon against a daily average of 17 lakh.

In the afternoon, the stock was trading 2.1 percent up at Rs 1,534 on the National Stock Exchange.

Elara Securities upgraded PVR-Inox to “buy” and raised the target price to Rs 1,900, citing a favourable risk-reward ratio.

It implies an upside of 28 percent from the current market price.

The brokerage said the content pipeline in CY25 would improve but it remained cautious for the current year.

The company was likely to struggle in CY24, given the negative impact of Hollywood slate delay (Writer’s Association strike), lower Hindi box office because of fewer large budget films in the near term and increased dependence on big budget films (more than 90 percent) as small- and medium-budget films continue to struggle at the box office, it said. OTT platforms were turning cautious about buying digital rights of movies, which too, would add to the problem.

Follow our market blog to catch all the live updates

The concerns were overdone, Elara Securites analysts said, adding that PVR-Inox has a healthy outlook in the medium term.

The counter is trading at premium valuations of 16.5x FY25E EV/EBITDA.

PVR-Inox has said it will live-screen the Ayodhya Ram Mandir inauguration on January 22 at all its outlets and has offered free popcorn to all ticketholders.

On January 19, the company received an assessment order of Rs 22.53 crore (tax demand, interest and penalty) from the Gurgaon additional commissioner CGST.

PVR said plans to challenge the order before the “higher authorities/ judicial body”, it told exchanges.

The stock has fallen 11 percent since October 1, underperforming the Nifty, which gained 10.3 percent during the period.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.