Recommendation Review: PVR

We had recommended PVR to readers in DSIJ Vol. 28, Issue No. 21 (dated October 6, 2013), when it was trading at Rs 435. Our call was especially backed by improved investor sentiment in the exhibition business. The kind of collection the exhibitors had managed on account of the blockbuster movies in the past few months has really helped them to put in a better financial performance for the June quarter. 

The performance for the September quarter is also likely to be better. On the micro front, the company has plans to add another 150-200 screens to its current tally of 255. Apart from that, the new initiative of bowling alleys (PVR Blu-O), which the management was quite bullish on, has started yielding results. The company earned Rs 40 crore from this division in FY13 (up from Rs 13 crore in FY10). 

The counter was placed well valuations-wise, as the recommended price of Rs 435 discounted its trailing four quarter earnings by 7.8x. After our recommendation, the scrip moved upwards. Through our SMS service, we had advised investors to book profits at Rs 510. Those who missed that opportunity can do so at the current levels.