PVR dips 5%, hits over 10-month low post December quarter results

According to analysts, key medium-term trigger for the stock will be the proposed merger with INOX, which likely to be consummated within a month

Shares of PVR dipped 5 per cent to hit over 10-month low of Rs 1,594.55 on the BSE in Friday's intra-day trade despite the multiplex operator reporting a strong recovery quarter-on-quarter (QoQ) led by improved content performance in the December quarter (Q3FY23). The stock was trading at its lowest level since March 8, 2022.

Meanwhile, shares of Inox Leisure were down 4.4 per to Rs 473.70 on the BSE in intra-day trade. In comparison, the S&P BSE Sensex was down 0.27 per cent at 02:11 PM.

In the past week, both these stocks have underperformed the market by falling 8 per cent, after the National Company Law Tribunal (NCLT), Mumbai Bench, on January 12, 2023, allowed the Proposed Scheme of Amalgamation between PVR Ltd & INOX Leisure. In comparison, the Sensex was up nearly 1 per cent during the week.

PVR said the company expects to complete all the legal formalities with respect to the proposed merger, including issue of PVR shares to Inox shareholders, within 45 days of receipt of certifi­ed true copy of the order passed by NCLT.

The board of the respective companies at their meeting held on March 27, 2022, had approved the scheme of amalgamation of INOX with PVR. Subsequent to the scheme becoming effective, the shareholders of INOX Leisure will receive the shares of PVR Limited as per the approved exchange ratio, which is for every 10 shares of INOX Leisure 3 shares of PVR will be issued.

The intent behind this partnership is to accelerate the growth of the company and the sector, which has been heavily affected over the last few unprecedented years, PVR said.

Meanwhile, PVR, the largest multiplex chain in the country, posted a consolidated net profit of Rs 16.2 crore in Q3FY23, against a loss of Rs 10.2 crore in the corresponding period of the previous fiscal. PVR's consolidated revenue from operations rose 53 per cent year-on-year (YoY) to Rs 941 crore from Rs 614.2 crore a year ago.

The management said the quarter witnessed a sharp bounceback from the previous quarter on the back of strong content performance. The same was reflected in the growth of key operating metrics like Admits, ATP (average ticket price) and SPH (spending per head on food and beverages).

According to analysts, the near-term monitorable is big ticket content performance, which has seen inconsistency in performance, post Covid. For the medium to long term, key trigger will be merger (likely to be consummated within a month) post which the MergedCo will benefit from faster growth trajectory.