With PVR stock price up 32% so far in 2022, stock could rally up to 43% more; brokerages say buy, check target price
PVR’s share price jumped more than 4% in early trade on Tuesday, a day after the multiplex operator announced a consolidated net loss of Rs 105.49 crore in the fourth quarter ended in March 2022 from a net loss of Rs 289.21 crore in the January to March quarter. one year ago. PVR stock jumped over 4.7% to an intraday high of Rs 1,785 from Rs 1,704.95 at the previous close on BSE. PVR’s share price is up 31% so far this year and analysts expect upside potential of up to 43% as PVR plans to step on the pedal by opening 125 new screens across India to capture market share and increase reach. The post-pandemic recovery is also expected to drive growth in FY23.
Should you buy, hold or sell PVR shares?
ICICI titles: Buy
Target price: Rs 1,965; Up: 15%
Analysts at ICICI Securities said: “The forecast for 126 new screen openings is strong due to the impending remission of pent-up sites and the start of operations in them in fiscal year H2FY23. PVR is excited about the currently strong movie pipeline. Recent successes of Hindi dubbed content are increasing the addressable box office market in India. Ad revenue is critical to profitability, and the company expects it to normalize within 3-4 months. The brokerage increased its EBITDA estimates by 10-30% in FY23-24 by increasing its ATP assumption. As a result, it maintained a “buy” call on the stock and raised its target price on the stock to Rs 1,965 from Rs 1,804 earlier. But it reduces the EV/EBITDA multiple to 15x (instead of 16x) to bring parity with INOX.
Financial JM: Buy
Target price: Rs 2,120; Up: 24%
JM Financial Services analysts believe that PVR has weathered the worst of the pandemic and is now expected to post its best ever for FY23 due to bundled movie releases, new screen additions and increased ticketing and F&B expenses. The ongoing recovery reinforces the relevance of cinemas for Indian consumers (amid higher levels of OTT adoption) and a strong theatrical release pipeline should help normalize attendance to pre-pandemic levels. Additionally, PVR is expected to aggressively add screens that are currently shipping, driving mid-term growth. The brokerage expects ticket price increases and higher per capita spending to boost underlying profitability from pre-Covid levels. “With multiplexes likely to show significant consolidation, a long track for screen penetration and higher profit pools, we assume coverage on multiplexes with a BUY rating on PVR with a target price of Rs 2,120 , showing a 24% increase,” he said.
Nirmal Bang: Buy Now
Target price: Rs 2,438; Up: 43%
Nirmal Bank analysts believe the strong content pipeline, hangout-hungry clientele, higher ATP and SPH give them confidence for a stellar rebound in FY23. high margin lags 3-4 months behind BO and F&B segment recovery. Ad spend in 4QFY22 was 25% of the pre-Covid level. “As of FY23, we expect full normality in the sector and we continue to remain bullish on the PVR with a buy position and a target price (TP) of Rs 2,438, based on an EV/EBITDA multiple of 14x FY24E EBITDA. With the proposed merger (PVR-INOX merger), we believe the valuation multiples may expand beyond what we have anticipated,” the brokerage said.
Motilal Oswal: neutral
Target price: Rs 1,650; disadvantage: 3%
According to analysts at Motilal Oswal Financial Services, the PVR recovery process halted at 4QFY22 due to the Omicron COVID wave. At present, a recovery in occupancy, a healthy ATP on a release basis and a strong film pipeline are the main strengths of the company. “A return to the exclusive eight-week screening window for Hindi films by July 22 would mitigate the risk posed by OTT platforms. We largely maintain our estimates and neutral rating,” they said. risk emanating from the increasing scale and traction of film releases on OTT platforms since the COVID-19 pandemic, coupled with subscriber growth and strong reception from mainstream players on these platforms, analysts maintained cautious about the cinema space.”We expect the dynamics of the industry to change over time,” added Motilal Oswal.
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