PVR stock price nearing its 52-week high

MUMBAI: The stock of exhibition company PVR has treading closer to its one year peak of Rs166. At present, the company’s stock price is trading at Rs 155. In the last six months the company’s stock has appreciated by 15.5%. This positive interest in the company’s stock has been due to strong screen expansion and increasing footfalls.

In the last few months, the segment leader opened four screens in Kolkata, four screens in Nanded in Maharashtra, four screens in Jallander and three screens in Ujjain, taking its screen count to 173 screens. In the coming nine months, the company plans to add 75 more screens. This is a part of its expansion plans for this fiscal for which it has planned capital expenditure of Rs125-150 crore.

A substantial part of this screen expansion is in the tier-II and III cities of India, which are witnessing increasing purchasing power of the consumers. Hence, this strong screen expansion is set to drive growth for the company in the coming quarters. Adding to the prospects of increasing revenues for the exhibitioner is the increasing footfalls. In the March 2012 quarter, the company’s footfalls increased to 0.55 crore, a jump of 51% on a year on year basis. This augurs well for the company as there are interesting films in the pipeline in the present and the coming quarter.

Besides this, the company’s other entertainment business is doing well. Its bowling alley business showed growth of 107% to Rs6.75 crore in the March 2012 quarter, contributing 6% to the company’s net sales. This shows the increasing acceptance of bowling sport as an alternate form of entertainment among cinema-goers. The company plans to add four bowling centres across Bangalore, and Pune in the present fiscal. This expansion would be funded through internal accruals and leveraging its balance sheet. With this expansion, the company’s plans to increase its average ticket price by 4-5% in the present fiscal. At present, the company’s average ticket price is Rs156.

For the March 2012 quarter, the company reported 31% growth in consolidated net operating revenues to Rs 117.69 crore. Revenues from its movie exhibition business grew by 52% to Rs 104.38 crore, while from movie production and distribution business fell by 61% to Rs 7.31 crore. The company’s net loss stood at Rs13.24 crore as against a loss of Rs1 crore in the last year’s March quarter.