PVR shares seen rising by almost Rs 1,000 as multiplex operator woos analysts with future plans

Shares of PVR – a multiplex theatre chain operator – rose on Wednesday, bucking the overall weak trend on Dalal Street, after the company's management laid out strong future plans on a call with investors.

PVR shares rose almost one per cent to end at Rs 1,542.1 apiece, after brokerages laid out target prices as high as Rs 2,500 for the PVR stock – marking an upside of nearly Rs 1,000 from its closing price on Tuedsay. The PVR stock rose by as much as Rs 47.3 or 3.1 per cent to Rs 1,575 apiece during the session. PVR shares have been on a rising spree since a 52-week low recorded during intraday trade on Monday.

PVR and INOX Leisure had in March 2022 announced the merger to create the largest multiplex chain in the country. Once the merger takes effect, PVR-Inox will have a network of more than 1,500 screens.

PVR recently completed a merger scheme with INOX Leisure. Read more on PVR-INOX

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Here are some of the key takeaways from PVR's call with investors and analysts:

• Management sees Rs 225 crore of annual EBITDA synergies which could boost FY25 margin by around 34 per cent 
• Merged entity PVR-INOX to further strengthen its leadership position, targets to add 180-200 screens annually 
• As many as 40 per cent of new screens to be opened southern parts of the country
• Nearly 82 per cent of the screens to be opened in metro, Tier 1 cities
• 160 screens under fit-outs; around 150-160 expected to be received for handover in FY24
• Company to expand food and beverage (F&B) footprint by upgrading product offerings at competitive prices, tying up with Zomato, Swiggy for delivery

What brokerages make of PVR 

BofA and CLSA each maintained a ‘buy’ rating on the PVR stock following strong commentary from PVR’s management. The multiplex chain entity along with its merged partner INOX is expected to focus on expansion and synergies with the completion of amalgamation between the two.

BofA has a target of Rs 2,405 per share for PVR, implying upside potential of 57 per cent. CLSA has its target for PVR shares at Rs 2,500 per share (63 per cent upside).

Motilal Oswal has a ‘neutral’ rating on PVR, citing uncertainty around the acceptability of content, a slower recovery in occupancies and advertising revenues, increased risk of rising scale, and the traction of movie releases over OTT.

PVR: Company profile

PVR is the largest film exhibition company in India with 1,674 screens across 114 cities with 358 properties and an aggregate seating capacity of 3.56 lakh seats.

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