ICICI Securities Places Buy On Midcap Stock, Sees 42% Strong Upside, Trading 2.77% Up 52 Week Low

Leading brokerage firm ICICI Securities is bullish on PVT Inox Ltd. The brokerage recommends 'Buy' on the stock with a target price of Rs 1,950 apiece. It sees a strong upside potential of up to 42% from its current level.

PVR Inox is a midcap Entertainment sector company having a market capitalisation of Rs 13,461.95 Crore.

Valuation

ICICI Securities said, "We see the content pipeline for PVR Inox improving from Q2FY24E and occupancy levels improving in tandem, hence, we expect a mean reversion of valuation multiples to historical averages. We have factored in 9.2% revenue growth (pro-forma) for FY24E with 560 bps EBITDA margin (pro-forma) expansion. Accordingly, our target price is Rs1,950 (prior: Rs2,100) with an unchanged multiple of 16x FY25E EBITDA. In our bull case, we see the stock trading at Rs2,200 and in our bear case - at Rs1,150, implying a risk reward skew of 3.56:1. Re-iterate BUY. Key risks: occupancy improvement to pre-covid level delayed beyond FY25E and merger synergies/efficiencies of scale not playing out."

Stock Outlook

PVR Inox last traded at Rs 1374.05 apiece, down 0.37% or Rs 5.05 from its previous close of Rs 1379.1 apiece on BSE. The stock traded its 52-week high on Aug 08, 2022, at Rs 2,211.55 apiece and 52-week low on May 17, 2023, at Rs 1,336.50 apiece on BSE. The stock is trading 2.77% up from its 52-week low.

The stock has continuously fallen in the 1 year. It declined 0.64% in 1 week, 2.92% in 1 month, and 9.38% in the past 3 months, respectively. It has fallen 26.15% in the past 1 year. It jumped 2.93% in 2 years, 39.55% in 3 years and 2.33% in 5 years, respectively.

About - PVR Inox Ltd.

PVR Inox is India's largest and most premium film exhibition Company in India with 1697 screens across 114 cities (India and Sri Lanka) with 360 properties and an aggregate seating capacity of 3.59 lakh seats. The company recently completed the merger with INOX Leisure Limited.

Disclaimer - The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.