Prime Stock Recommendation: The star in the hard-to-crack entertainment business
A key player in an entertainment avenue that hasn't gone out of fashion!
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9 thoughts on “Prime Stock Recommendation: The star in the hard-to-crack entertainment business”
Greetings. The current status -the scrip is down by 30% from your recommendation
It’s a major dip. What are your current thoughts on this? Is this due to general market conditions / financial results of the company or general structural pattern change in consumption?
Will it still remain under a buy category / should we average it ?
Hello Sir,
The current stock price correction is on account of multiple factors including 2024 box office collections being poor and technical reasons (F&O exit). We expect a revival in box office collections in 2025 on account of a healthy line up. We also do not believe there is any structural slow down in consumption.
As regards averaging – yes you can. However, please do limit your exposure to the stock in your portfolio as it is a high risk one.
Hope this addresses your query.
Thanks,
Many thanks Ms Pavithra !!
When buying PVR inox, brokerage nudges with the following comment “PVRINOX is under surveillance measure (Derivative contracts in the scrip to be moved out of Future and Options and EPS in the scrip is zero). Please analyse the risks carefully before proceeding”. I wanted to understand if these points been taken into consideration while doing the research?
Hello Sir,
This is an alert from your broker that PVRINOX may enter F&O ban list. This is only for the derivatives market and will not impact an investor wanting to buy the stock.
As regards EPS in the scrip being zero, our research report covers the important point that PVRINOX makes losses at the net level. So yes this was definitely taken into consideration in our research.
Hope this addresses your query. Please do write to us if any more clarification is needed.
Thanks,
Thank you for the reco note. Just my 2 cents on this. If we do a scuttlebutt, we may find that movie watching is as a leisure activity is in decline (when I look at my friends and family). A few “structural” reasons are a) OTT growth and popularity b) Technology advancements and affordability that has resulted in people buying big TVs and sound systems at home to create a movie like experience at home c) The traffic conditions in crowded places around Cinema halls also deter people d) There are other competing modes of entertainment for a family weekend (e.g. bowling, kids parks etc.) are now getting popular. To counter these, I dont find “structural” measures that a content receiver like PVR can take to bring back and retain high levels of occupancy in times to come. Moreover the “perishable” nature of the seats inventory means that there’s very little the company can do to recover from a weak quarter(s).
Thank you Sir. Fully appreciate your view points.
As these are subjective judgements, you may very well be right. However, in our view families do seek out-of-home entertainment opportunities, as evident from brisk ticket sales for standup comedies, concerts, ipl matches etc. OTT notwithstanding, multiplex occupancies had revived to healthy levels pre COVID. Movie watching is in fact among the more affordable OOH experiences, that offers luxury and food along with the content. Reruns of old favourites, hosting corporate events screening football and cricket matches are some measures PVR is already taking.
Thank you Aarati and Pavitra. I respect your views and given your rigor, I am sure you have much more learned viewpoints than mine.
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