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Brokerages turn bullish on PVR; here's why

Brokerages turn bullish on PVR; here's why

The company reported a net loss of Rs 289.1 crore in Q4 against a loss of Rs 74.5 crore in the year-ago period. Revenue from operations stood at Rs 263.3 crore against Rs 662 crore, down 60.2 per cent year-on-year basis

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PVR share rose 3 nearly per cent to hit an intraday high of Rs 1365 on BSE as brokerages maintained their bullish stance on the stock post announcement of March quarter earnings.The share has delivered 37.5 per cent returns in the last 12 months and risen 2.57 per cent since the beginning of this year.

The stock ended 2.26 per cent higher at Rs 1,353 against the previous close of Rs 1323.05 on BSE. Market cap of the firm rose to Rs 8,221.12 crore.The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.

The company reported a net loss of Rs 289.1 crore in Q4 against a loss of Rs 74.5 crore in the year-ago period. Revenue from operations stood at Rs 263.3 crore against Rs 662 crore, down 60.2 per cent year-on-year basis.

"Results for the quarter and year ended March 31, 2021, are not comparable with results for the quarter and year ended March 31, 2020, as the operations were severely impacted due to Covid 19 induced lockdowns, staggered re-openings, social distancing requirements, limited content flow and low consumer confidence," the company said.

Through aggressive cost-containment measures, the company was able to reduce its fixed costs in FY21 by 63% as compared to FY20. This included a reduction in Rent by 79%, CAM by 42%, and all other fixed overheads being reduced by 57%

Commenting on the results, Ajay Bijli, Chairman cum Managing Director, PVR Ltd said "FY'21 was marked by never before seen challenges for the multiplex industry, which was one of the most impacted by the pandemic. PVR showed resilience and ingenuity in the face of this adversity."

"As we look towards putting the past few quarters behind us, the company has turned its focus towards vaccinating all its employees and their families. We want our patrons to feel safe when they return to theatres to enjoy the latest movies. As of date, we have already vaccinated 59% of

our employees," he added.

ICICI Direct expects the recovery to be a function of the speed of vaccination and response to new content.

"We now upgrade to buy (versus hold earlier) as we believe that recovery with increased vaccination push will be sharp. We assign FY23E EV/EBITDA multiple of 12.5x (vs. 11x, earlier) with a target price of Rs 1,540 per share (earlier target Rs 1,440)," the brokerage house added.

Prabhudas Lilladher has maintained a 'Buy' rating on the stock with a target price of Rs 1,429 per share

"We keep our FY23E estimates broadly intact and remain constructive over the long term as the content pipeline is strong, which is expected to result in bunching up of releases post re-opening."