PVR Inox share price may see 40% upside on improved revenue outlook; here's why

livemint.com:

GST Council modification on food and beverages (F&B) taxes, domestic brokerage Nuvama Institutional Equities stated in its research report that the route forward for PVR Inox seems sentimentally favourable due to two main factors, that is council decreasing GST on F&B (from 18% to 5%) at cinema halls - P&L is unaffected, but the GST dispute's hangover is removed. Second, there are several films scheduled for release. "Hollywood (Mission Impossible – Dead Reckoning Part One’s release this week) coupled with regional movies picking up well while Hindi movies remain a WIP (a key monitorable)," added the brokerage.

The goods and services tax - GST Council reduced the rate of GST on food and beverages earlier this week from 18% to 5%. The brokerage also stated that it prefers multiplexes to broadcasters and that it anticipates PVR Inox's ad revenues to gradually improve and its spending per head (SPH) to remain robust owing to proactive measures. "With the strong content pipeline, we expect recovery in footfall, if content delivers.

We continue to maintain ‘buy’ on PVR Inox with a target price of ₹1,990," the brokerage said. According to the brokerage, PVR Inox shares may see 40% upside from the price of ₹1,426. In the past couple of trading sessions the PVR Inox shares has been trading near its 52-week low levels.