Despite the Stock Downer, PVR is Winning the Game! Here's Why PVR Limited's stock valuation has rocketed from INR 119.55 on August 26, 2009 to INR 1,562 on the BSE

One industry that can never go out of business in our country is Entertainment. Leveraging the power movies hold over the citizens of India is PVR – the largest chain of multiplexes in the nation. 90 per cent of Indians has visited a PVR at least once in their life. The pouring support by cine-lovers has helped the multiplex business stand as one of the tallest players among its peers.

In fact, over the last 10 years, PVR's movie exhibition, distribution and production business has grown 10X. Despite the economy slump, PVR Limited's stock valuation has rocketed from INR 119.55 on August 26, 2009, to INR 1,562 on the BSE. Notably, the public entity's share price has gained 17.87 per cent in the last one year.

While the outlook for PVR remains bright, there are various factors acting in the background leading the game for India's most visited movie chain:

Topping the Competition

Despite the momentary slump of 2.74 per cent in 2019, PVR share price has outperformed its closest competitor, Inox Leisure by a huge margin. Since 2009, PVR has logged a gain of 1,214 per cent whereas Inox Leisure share price managed a rise of 383.44 per cent. The company has logged INR 190.52 crore net profits in the last fiscal compared to a loss of INR 9 lakh for the fiscal ended March 2010.

Acquisitions

In August 2018, PVR had announced to acquire 71.69 per cent stake in SPI Cinemas for about INR 633 crore, in an all-cash deal. The share price of PVR added 2.5 per cent intraday on August 26 after NCLT (National Company Law Tribunal) approved the scheme of amalgamation, the transferor company with PVR, the transferee company effective from the appointed date of August 17, 2018.

Wide Presence

Founded by Ajay Bijli and brother, Sanjeev Bijli, PVR owns and operates multiplexes across 19 states and union territories with a total of 794 screens. Major income segments for the firm are box office (ticket revenue), food and beverage and advertisement. The promoters holding in the company stood at 20.24 per cent whereas Institutions and Non-Institutions held 70.50 per cent and 9.26 per cent respectively.

Targeting Small Cities

Having 797 screens across the country, PVR is yet to spread its wing across the tier-2 & tier-3 cities of India, to tap which, the company has recently launched a new sub-brand, "PVR UTSAV is a natural progression for us, further consolidating our foothold in the small towns of India," Sanjeev Kumar Bijli, Joint Managing Director, PVR told the media.

The Right Collaborations

PVR has drawn power through extensive collaborations with the likes of Dolby & IMAX in the past. Ajay Bijli, Chairman & Managing Director, PVR Ltd has earlier told us, "Whatever is new in terms of technology, we try to introduce that. So we always keep an eye on that to see what will be acceptable to the Indian audience. Experiments are still being done. Things are happening on the projection side as well."