Budget 2022: Is PVR set for a rally ahead of budget? History suggests this!

ZeeBiz Exclusive: With less than a month for the announcement of Union Budget 2022, Zee Business Senior Research Analyst Varun Dubey brings a stock that is expected to remain in action ahead of the D-day. Traditionally, this leisure stock has given 6-7 per cent returns in the budget build-up period. 

This stock is PVR Limited and in the last five years, the stock witnessed a growth of 7 per cent, 3.5 per cent, 0.1 per cent, 30 per cent and 7.5 per cent in the year 2017, 2018, 2019, 2020 and 2021 respectively. An average return over a five-year period is 4 per cent. The returns go up to 6-7 per cent if 2019 performance is overlooked. 

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PVR in the last five years ahead of budget month in January, generally, shows strength and rally. On Wednesday, the stock hit a day’s high of Rs 1360.85 per share and has been trading around half a per cent higher to Rs 1353.55 per share on the BSE at around 02:11 pm.  

Zee Business Managing Editor Anil Singhvi says, the stock is ready for short covering considering the surge in a month ahead of budget.  

Choice Broking Executive Director Sumeet Bagadia states, PVR shares are oversold, and a pressure is seen from the upper-side, however, at lower level it has made double bottom pattern on daily chart. 

He added, the breakout in the stock is visible only once the stock breaches Rs 1370-75 per share level and after that a growth of Rs 100-150 is possible. The analyst sets a target of Rs 1450-1500 per share only when it gives breakout at said levels. 

PVR along with other unlock theme stocks have been most beaten, amid uncertainty of normalization and lockdown like restrictions. In the last five days, the stock surged 7 per cent on the BSE, while it has given negative returns in the last 6 and 12 months period so far.