PVR Inox shares: Can Shah Rukh Khan-starrer 'Jawan' give stock a lift?

Shares of PVR Inox gained a strong buying interest during the trading session on Thursday as a new Shah Rukh Khan-starrer 'Jawaan' hit the silver screen on September 7. Analysts tracking the stock continue to remain positive on the stock considering the return of masses to the theatres backed by the strong pipeline. However, they say some near-term hiccups for the counter.

After the success of recent movies, PVR has a strong pipeline of 'Salman Khan-starrer 'TIger-3', SRK-starrer 'Dunki' and Prabhas-starrer 'Salaar'. Other than these, a host of actors are queued up with their movies in the festive season, which may draw crowd at the box office.

Shares of PVR Inox gained about 3 per cent to Rs 1,870 on Thursday backed with heavy trading volumes as positive reviews for SRK and Atlee's 'Jawan' swamped over the internet. However, the stock is still 5 per cent below its 52-week high of Rs 1,975 hit about a year ago.

Jinesh Joshi, Research Analyst at Prabhudas Lilladher, who gave a positive outlook on the stock, said that PVR Inox has been in momentum since mega releases like 'Gadar-2', 'Jailor' and even 'Dream Girl-2' have also done good at the box office. Also, other movies like 'Satyaprem ki Katha' and 'Rocky Rani ki Prem Kahaani' have done well in terms of numbers.

After a robust July and a record August, September is beginning on a very positive note for PVR INOX due to Jawaan, likely Rs 70 crore India collections on day 1. August set new records, which is in a sharp contrast to the discretionary slowdown impacting QSR or apparel. Cinemas and OTT shall both co-exist in India, said Nuvama Institutional Equtiies, citing world cup 2023 as a small risk.

"As highlighted in Cinema customers are back, we expect all-time record in Q2FY24 results and are hence increasing FY24E and 25E EPS by 5.2 per cent and 8.4 per cent, respectively. With strong footfalls, ad revenues are likely to see a robust recovery. In spite of the 32 per cent run-up over past few months," it said retaining 'buy' with an increased target price of Rs 2,210.

"One should wait for Q3 performance, which is the festive quarter, as some more major releases of some the biggest names of Indian cinema are lined up with their much-awaited projects. If the content quality is in-line with the expectations and can deliver decent entertainment, it will bode well for the PVR Inox."

Joshi said that fresh buying at current levels warrants some caution, as Cricket World Cup 2023 may catch some of the potential eye-balls but its impact will be short-term and the overall outlook continues to remain positive. He advised existing investors to hold the stock for a longer term and do a periodic revision after every quarter.

Analysts believe that more movies in Rs 100 crore club and operational efficiencies and better ATP/SPH will improve the screen economics. Better average ticket price will increase the margins further. However, impact of World Cup 2023 and other events may have their short-lived impact.

The largest film exhibition and multiplex chain PVR Inox shares have been in limelight action since blockbuster releases like 'Gadar-2' and 'Jailor' stormed the box-office collections. We believe the box-office collections would continue to see an uptrend considering Jawan release, said Prashanth Tapse, Research Analyst and Senior VP Research at Mehta Equities.

"It is believed that Shah Rukh Khan surpasses 'Pathaan' collection to create an all-time record in pre-sales. Recent trends in Bollywood movies would bring in a sharp turnaround in multiplex players and exhibitors to get back into profits in coming earnings, We expect Q2 earnings would surprise the street based on a healthy trend in box office collections," he said.

Technically, PVR Inox is in the positive zone with support near Rs 1,800 level and resistance above 1900 levels and any close above Rs 1,910 we can expect weekly breakout towards Rs 2,000 mark. Hence traders can continue to hold an optimistic outlook in this counter, Tapse added.

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