PVR Inox stock price will fall 13% in 2024 due to lack of blockbuster movies. Is now the right time to invest?

After a sluggish start to 2024, PVR Inox showed signs of recovery in June, with shares up nearly 10%. This increase follows a slight decline of 3.8% in May.

Prior to that, the stock had risen 2.6% in April, but had faced losses in the first three months of the year. It decreased by 3.3% in March, 5.8% in February, and 12.3% in January.

Overall, the stock declined 13% in 2024, but was flat over the past year with a decline of 0.23%.

Also, currently, INR1,436.85, the stock is 23.5% off its 52-week high. INRHowever, it is up more than 19% from its 52-week low of 1,203.70 on June 4, 2024.

With blockbuster movies in short supply and more focus on cricket, is now a good time to invest in this theater stock? Here, we provide a comprehensive analysis of its fundamental and technical outlook.

basic idea

Securities firm MK maintained a “buy” call on the target price for PVR Inox. INR1,650 means an increase of more than 15%. According to the brokerage, the lack of movies is hurting the stock’s performance.

“PVR Inox’s weak share price reflects the lack of blockbuster movie releases in the past few quarters.While Q4 FY24 was below average, Q1 FY25 will also be affected by IPL, T20 World Cup, T20 World Cup, etc. The chain’s high fixed cost structure has exacerbated this problem, and a recovery in the pipeline could give the company some respite going forward. Big star movies have improved even though they are likely to be released only in 2025,” the brokerage said.

He further noted that management has initiated initiatives on both the revenue and cost fronts to maximize profitability, and that some of these initiatives are likely to bear fruit in the medium term. Structural issues remain, so occupancy rates are unlikely to recover to pre-COVID-19 levels, but prices are rising accordingly. It added that the stock’s performance continues to depend on improved box office revenue.

Technical view

Brokerage firm Anand Rati advised going ‘long’ with PVR Inox as a target. INR1,700, meaning a 19% rise and a stop loss. INR1,250 for a period of 6 months.

PVR Inox recently showed two important technical analysis signals indicating a potential bullish shift. First, the weekly Relative Strength Index (RSI) shows a bullish divergence around the 30 level. This divergence suggests that the RSI is starting to rise while the stock is falling, indicating a potential reversal in momentum. Secondly, the stock has broken the weekly RSI bearish trend line that has been around for about seven months, Anand Rati explained. A breakout of this trend line is an important signal that a long-term bearish trend may be reversing to a bullish trend.

Based on these technical indicators, investors and traders are advised to go “long” on PVR Inox and buy the stock within the price range. INR1,370-1,430. The target for stock price increase is INRAt $1,700 per share, the potential for strong gains is highlighted. To reduce risk, it is recommended to place a stop loss nearby. INRThe company said the daily closing price is 1,250 shares per share, ensuring protection against potential adverse movements.

About the company

PVR Limited (PVR) is India’s largest film exhibition company. The company ushered in the multiplex revolution in India with the opening of the first multiplex cinema in New Delhi in 1997, and is committed to innovation and operational excellence to make the big-screen movie experience available to everyone. We continue to lead the market with a focus on PVR currently operates a cinema network with 854 screens and 173 cinemas in 74 cities with a total of 180,000 seats.

According to PVR’s revenue breakdown for fiscal year 2022, approximately 52% of its revenue came from movie ticket sales. Revenue from food and beverages accounted for 30% of overall revenue, with advertising revenue, convenience charges, and other businesses each accounting for 6%.

Disclaimer: The views and recommendations above are those of individual analysts or brokerages and not of Mint. We recommend checking with a certified professional before making any investment decisions.