PVR at Rs. 1,200 - Buyer FLOP Hai. Seller HIT Hai:)

We have many times seen market giving irrational price to a share price, on both sides. This is either due to vested interests like Media and Investment Bankers, seen giving rosy outlook on a weak stock and justify high pricing. Case in point is RIL, when share was ruling at Rs. 2,300 plus in Sep 2020. Or in case of Vedanta, a strong stock, where AVOID call was a ritual, by Media and so called big Fund managers, in October 2020, at Rs.100. Infact we have loaded an analysis on Vedanta, of reason of our giving buy call at Rs. 95, which was well appreciated.

PVR seen to be a similar hyped stock, which is now ruling at Rs.1,200, with M Cap of Rs. 7,250 cr and borrowing of Rs. 1,450 cr, making its EV at Rs. 8,700 cr. For 9 months of FY 21, company made Loss Before Tax of Rs. 694 crores. Looking to second wave of Covid, no hopes are seen for multiplexes to open on full scale till 30-9-21. So, next 9 months losses will also be over Rs. 694 cr.

PVR had Net Worth of Rs. 1,370 cr as at 30-9-20, after rights issue of Rs. 300 cr last year. So, major portion of NW (by approx Rs.1,000 cr) will get eroded from this NW by 30-9-21. Even post normal situation, PVR may have to spent over Rs. 500 cr, to restore, Air Condition, Seats, Ambience, Auditorium and Interiors, coupled with renewal of Lease. So, operations of PVR is seen having a Dark Black Hole for the next 6 months.  

Promoter stake is at 17.06% (fell from 18.79% as at 9-10-20), while Institutional Investors are holding 70.53%, aggregating to 87.59%, as at 31-3-21. So, ownership is of, for and by BIG FISH, who are making share rule with absurd rate.

It is like movie is flop in FIRST DAY FIRST SHOW.
But movie has bagged 7 FILMFARE AWARDS.  

This is not a sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.