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PVR Shares Gain As Analysts Bet On Bollywood Content Reversal After Q2 Loss

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Shares of PVR Ltd. gained on Tuesday after most brokerages retained ‘buy’ ratings even as poor Bollywood performance dented the movie exhibitor’s second-quarter show.

The country’s largest multiplex operator posted a net loss of Rs 71.23 crore in the July-September period against a net profit of Rs 53.38 crore in the previous three months. Footfalls fell 28% sequentially, resulting in a 30% decline in revenue, according to its exchange filing.

Net box office collections fell 38% to Rs 330 crore over the previous quarter, the company said in its presentation. Average ticket price and spend per head declined sequentially to Rs 224 and Rs 129, respectively from the all-time high in Q1 FY23, attributable to weaker movie performance.

Both average ticker price and spend per head were also affected by the special initiatives, such as flat Rs 75 ticket pricing on National Cinema Day, aimed at driving up footfalls.

Advertisement revenue was 9% lower sequentially and continues to be below pre-Covid levels.

Net debt at end-Q2 increased to Rs 1,100 crore as against Rs 840 crore at the end of Q1 FY23 on operational losses in Q2.

But the management indicated that a good content pipeline will provide for a healthy recovery from the third quarter. PVR expects ad revenue recovery to be gradual through the festive season. It saw a 62% recovery in the current quarter compared with 2019. It anticipates that the recovery will reach 70-72% of 2019 levels by the fourth quarter.

PVR is also confident about meeting new screen-addition guidance of 110-125 in FY23. Analysts expect these initiatives to support revenue growth going ahead. They, however, have cut target price for the movie exhibitor citing risks emanating from rising scale and the traction of movie releases over over-the-top platforms like Netflix, Disney Hotstar, Amazon Prime, etc.

Shares of PVR rose over 1.1% on Tuesday, as against a 1.2% gain in the Nifty 50. The stock rose over 2% in intraday trade on Monday before reversing gains to close 0.20% lower.

Of the 31 analysts tracking the company, 27 have a ‘buy’ rating, two suggest a ‘hold, and two recommend a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 28%.



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