Momentum Pick: PVR’s current underperformance not full movie; wait for up to 40% potential upside

Under pressure for a while now, PVR shares are trading near an important support zone. A solid base formation on technical charts puts it in a strong stead for a potential upside. While, the near term upside could be up to 14%, the stock has the potential to earn nearly Rs 600 per share for investors over a long term period. A combination of technical and fundamental triggers could engineer the uptick.

PVR shares ended at Rs 1,530.25 on the NSE on Thursday and were down by Rs 8.25 or 0.54%. Stock markets were closed for trading on Friday on account of Ambedkar Jayanti.

The stock has underperformed Nifty50 by more than 19% over a 1-year period and given negative returns of 21% versus negative 2% returned by the 50-stock index, according to Trendlyne data.



Anand Rathi: Buy | Recommendation at Rs 1,564 | Target: Rs 1,784 | Stop Loss: Rs 1,455 | Upside: 14%
PVR stock has been under pressure for quite some time and is now trading near a crucial support level, brokerage firm Anand Rathi said in a note. On a daily chart, there is a solid base formation along with bullish regular divergence which is looking lucrative, the note said, recommending investors to go long in this stock. It has a 1-month view on PVR.

“The counter has witnessed a breakout of a head and shoulders formation with strong volume on the weekly chart,” another analyst Pravesh Gour, Senior Technical Analyst at Swastika Investmart said.

“It is trying to form a double bottom on the daily chart, but it will be confirmed only when the stock gives a closing above Rs. 1,600. The overall structure is distorted as it trades below its all-important moving averages, but it is in a demand zone near 1,500. On the upside, Rs 1,600 is an immediate susceptible area; above this, we can expect a run-up towards 1650+ levels in the near term,” Gour added.

PVR is consolidating in a range where support is at Rs 1,480 and resistance at Rs 1,610, a third analyst ETMarkets spoke to, said. Nilesh Jain of Centrum Broking sees absence of any clear trend in the stock as of now.

Nuvama on PVR: Buy | Target: 2,125 | Upside: Rs 1,530 | Upside: 40%
Nuvama Institutional Equities holds a positive view on PVR arguing for its long term potential. It recommends a buy with a price target of Rs 2,125 estimating nearly Rs 590 per share or 40% gains.

PVR-INOX's latest strategy of driving consumption via sampling has come out directly from the has borrowed a leaf from FMCG companies. It has launched a unique 30-minute trailer screening show priced at just Re 1.

"We believe one of the most potent marketing tools for a film is trailers. This strategic content innovation by the company shall aid footfall growth. The benefit of this move shall be not only big-budget movies, but also mid-rung and small-rung flicks," the Nuwama report said. "We reckon this would have hardly any incremental costs and no adverse impact during peak demand," the report said.

While multiplex footfalls are still hovering at pre-Covid19 levels, on a positive note, spending rose by 173% YoY in FY23 on a soft base, according to a report by Razorpay. This augurs well for PVR, Nuvama maintained.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)