Entertainment Stocks: As cinema halls, multiplexes open, see how PVR, INOX will perform

Unlock 5.0 guidelines issued by the government allowing cinema halls and multiplexes to operate with 50 per cent capacity, has acted as a trigger for entertainment stocks, including PVR Limited and Inox Leisure. The very next trading day after the announcement saw the stocks gain as much as 10 per cent and 15 per cent respectively at the time of the opening of markets.  

While the share price of PVR touched levels around Rs 1334.50, the latter traded around Rs 312, on 1st October. 

Around 11:30 am today, PVR share price was trading at Rs 1256.60 on the NSE, down by almost 1.4 per cent from the Monday closing. Meanwhile, Inox was trading around Rs 282.90, down by almost 1.8 per cent from the previous close. 

Technical Analyst Nilesh Jain said that the news of opening with 50 per cent capacity was an instant trigger and may not have a material impact on the prices of the stocks in the near to medium term. 

While the multiplexes and cinema halls will open from 15 October, it is highly unlikely that the public will start going to watch movies from the outset, he added. The fresh cases being reported even now are alarming and people will prefer personal safety over entertainment.  

The two stocks have seen significant correction since the announcement was made and the markets have accounted for this trigger now, the analyst said.  

Jain said that the pullback may not sustain over a period of time. The only sustainable trigger is the vaccine and nobody is sure about its arrival.  

Jain said that any buying in these stocks should be on corrections and investors should take a long term view on these stocks if they are planning to buy them. 

For PVR, the all-time high is Rs 2013.96 and the latest high was Rs 1450, he said. He said that the technical charts look positive. He puts the stop loss at Rs 1200.

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As for Inox, he said that the chart pattern is almost similar. The buying range is Rs 270-Rs 275. He puts the stop loss at Rs 240 while the target price between Rs 370 and Rs 400.