INOX, GVK One, Hyderabad (Source: Company Presentation)

Why Analysts Are Betting On INOX Over PVR

Analysts are betting on second-placed INOX Leisure Ltd. over India’s largest multiplex chain PVR Cinemas Ltd.

The reason: growth in advertising revenue. INOX’s income from promotions ahead of and during the movies rose more than 30 percent in the last three quarters compared with 10 percent growth for PVR.

That reflects INOX’s better brand strength and audience pull, said Karan Taurani, vice president for research at Dolat Capital.

INOX’s new strategy in the advertising segment is reaping huge benefits. This is visible in the strong ad growth in the recent past as the company managed to grow 40 percent in the first nine months of FY18.
Karan Taurani, VP - Research, Dolat Capital

Shares of INOX returned about 25 percent gains in the last six months compared with 6 percent for PVR. Nearly 80 percent of the analysts tracked by Bloomberg have a ‘Buy’ rating on INOX with a consensus target price of Rs 323, an upside of 23 percent.

In comparison, PVR has 60 percent ‘Buys’ with a potential upside of 22 percent.

“We are ensuring that the growth trend continues for INOX Leisure. We plan to add 50-60 screens every year,” Alok Tandon, chief executive officer at the multiplex chain, told BloombergQuint. “Our focus remains on service, technology and luxury and we operate 9 INSIGNIA properties which offer 7-Star luxury experience to guests.”

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