PVR shares delivered a massive return of 114.5 per cent over the last eight months, from its 52-week low of Rs 706.55 as on May 19, 2020, despite posting a net loss of Rs 458.67 crore for the nine-month period ended December 31, 2020. The multiplex chain operator has reported net loss of Rs 49.21 crore during the December quarter of the current fiscal as against net profit of Rs 36.26 crore in the year ago period as COVID-19 situation across the country continued to adversely affect its operations. This was the fourth consecutive quarter when the PVR had reported net loss, albeit it was lesser than the previous three, as the film exhibition business remained subdued in wake of the coronavirus pandemic.
Post December quarter results, most brokerages have maintained bullish stance on this multiplex stock, citing that the rollout of COVID-19 vaccines bodes well for the company. Going ahead, the outlook for theatre industry remains robust on hopes of strong rebound in footfalls after overwhelming opening of the recently released Tamil movie, 'Master'. Analysts at Edelweiss Securities and JM Financial have assigned 'BUY' ratings on PVR stock with target prices of Rs 1,835 and Rs 1,650, respectively. Meanwhile, analysts at Motilal Oswal have downgraded PVR stock to 'Neutral', expecting profitability and businesses to remain muted.
On Monday, shares of PVR opened higher at Rs 1,480 against the previous closing price of Rs 1,473.40 on the BSE. During the day's trade, the stock rose as much as 2.88 per cent to hit an intra-day high of Rs 1,515.85, before closing at Rs 1,498.60, up 1.71 per cent. The stock touched 52-week high of Rs 2,082.82 as on February 20, 2020. In contrast, the BSE benchmark Sensex settled day's trade at 48,564, down 470 points or 0.96 per cent.
On the volume front, there was surge in buying as 1.66 lakh shares changed hands over the counter as compared to two-week average volume of 1.31 lakh shares on the BSE.
Brokerages expect PVR stock to rise up to 25 per cent from its current market price of around Rs 1,475 on the back of improvement in financial performance during December quarter, thanks to cost effective measures and expectations of improvement in footfalls in cinemas.
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PVR losses in December quarter declined to Rs 49.21 crore as compared to net loss of Rs 225.73 crore and Rs 184 crore in June and September quarters, respectively, as cinemas remained closed during these quarters. The consolidated revenue from operations, however, fell by 95 per cent to Rs 45.4 crore against Rs 915.74 crore in Q3 FY20. During the quarter, the company reached settlements with landlords for 88 per cent of cinemas for complete or partial waiver or discounts for COVID-19 lockdown period.
The government, under Unlock 5 guidelines, had allowed cinemas to restart operations from October 15 onwards with 50 per cent capacity. The October-December quarter witnessed films returning to the big screen and PVR cinemas registering footfalls yet again. However, on account of a staggered reopening across states and capacity restrictions, producers remained cautious with limited movies being released. The revenue is expected to shore up with rise in ticket prices following release of fresh content.
PVR has said it will continue to take all measures necessary to further reduce the impact at all cost levels, including fixed costs and outgoing cash flows.