PVR Share Price: Brokerages bullish despite weak Q2 performance – Check reasons, triggers

PVR Share Price: Despite weak second-quarter earnings for the financial year 2022-23 (Q2FY23), most brokerages are bullish on the stock, expecting the medium-term growth outlook healthy. The multiplex chain PVR on Monday reported a loss in Q2 on higher expenses and the disappointing performance of Bollywood movies.

In Q2FY23, PVR’s loss narrowed consolidated loss at Rs 71.49 crore with people returning to cinema halls as the pandemic eases. While its consolidated revenue from operations in the July-September quarter of FY23 jumped over three-fold year-on-year to Rs 686.72 crore, the regulatory filing said.

Global brokerage Goldman Sachs maintained a Buy call on PVR with a target of Rs 2,350 apiece. It said a weak quarter is not a sign of structural headwinds and pointed out a lower revenue estimate by 3-11 per cent to reflect earnings miss.

Being bullish on the company’s performance, CLSA expects a medium-term growth outlook at 11/22 per cent FY20-24 revenue/EBITDA CAGR, respectively. The company in its outlook said the revenue recovery to pick up from Q3 on the good response from moviegoers and a strong content pipeline.

ICICI Securities pointing out positives for PVR said: Merger with INOX may be complete in next three months; window of eight weeks for OTT release reinstated; ad revenue likely to be at 62 per cent in Q3; and occupancy/ ticketing revenue has picked up in Q3FY23-to-date on strong movie pipeline.

The domestic brokerage cut EPS estimates by 29 and 7 per cent for FY23E and FY24E on lower occupancy and weak ad revenue. However, maintained a Buy rating with a revised target price of Rs 2,100 from Rs2,300 with an unchanged multiple of 16x FY24E EBITDA.

Similarly, Kotak Institutional Equities expects the business of PVR to gradually recover with improvement in Bollywood content. The PVR-INOX merger is on track and merger synergies can potentially drive a 15 per cent EBITDA upside. It maintained a Buy rating with a target of Rs 2,200.

On Tuesday, PVR share price closed over 2 per cent to Rs 1,729 per share on the NSE. The stock year-to-date has surged almost 29 per cent and gained over 2 per cent in the last one year.