Hi,
Booked out completely on Paushak. The results were nothing extraordinary and got a chance to exit after the Annual general body meeting (i dint attend) where the stock split/ bonus share was discussed. Felt like I’m not following the story other than it being niche phosgene manufacturer with moat being licenses issue restricted citing safety concerns
unbooked returns at 20% and booked profits at 5% so portfolio returns at 25% so far. not adding additional funds but a lot of churn happening. Especially after last may (during trump tantrums) when portfolio returns turned negative I’m being overtly cautious on capital preservation and expect this is more of a consolidation phase in market rather the bullish one.
Thought i will add my thesis on a pick i have in my portfolio PVR cinemas. (disclosure: holding 2% at 1200)
1743 screens across 352 cinemas
Net debt reduced by 38% since merger even in this quarter they reduced the debt thereby reducing the interest burden
Additional screen added using asset light model.
Now coming to the actual threat from OTT. already few articles cropped up citing ott fatigue and people storming back to theatres.It is visible from 3.4 crores people visiting movie halls this quarter compared to 3.1 last yr . Also this quarter july has been exemplary thanks to modest films bringing in footfalls in absence of tentpole releases ( sayyara) and also because of hollywood big budgets like superman and jurassic park. With big ticket releases like war 2 and coolie coming up , im pinning hopes on this quarter.
PVR has been a play on increasing disposable income. 10 yrs back i would think twice booking a movie and now with a family of 3 i don’t hesitate to book a movie over a weekend. Affordability also due to the movie tickets not keeping with the inflation.
Since PVR requires 20% occupancy to break even. if the line up in a quarter is good then it shouldnt be a problem at all. Also currently the revenue is skewed towards hindi releases and the hindi movie industry is recovering after a slump. so next few quarters should augur well for PVR INOX.
Few metric to watch , increasing footfalls, how the Asset light model pans out, impending big ticket releases, OTT fatigue