PVR is one of the better companies in the media space: Seshadri Bharathan

ET Now caught up with Seshadri Bharathan, Investment Analyst to get his views media stocks like Zee Entertainment, PVR and INOX Leisure.

With media companies spending on ads would you pick Zee Entertainment?

Definitely. Zee Entertainment as well as Sun TV. Zee Entertainment has regained its number two position in the general entertainment network. Also the company has reduced its programming cost which means the EBITDA has improved in the last quarter. Going forward the company would gain in the market share and as the consumer sentiment improves in this country the ad rates would increase. As for Sun TV the same logic applies. Also they have been gaining market share in the DTH (direct to home) space and that has added to the margin increase in the EBITDA for the company in the last quarter.

INOX Leisure and Fame India do extremely well but you have a pick in PVR. Given that INOX Leisure will get Fame India Screens, you are putting in a price target of 230 on PVR. Why would you look at PVR now?

If you look at the order of hierarchy PVR is the third largest multiplex in India with market share of more than 17%. They have a very diversified business model. Out of the total screens numbering 134, 43% of the screens are exempted from entertainment tax for the next two to three years time and this stock is trading at 14 times FY11 earning. With the increasing interest of investors in this space PVR is one of the better companies with strong operating margins.