Strictly my opinion as I’m not invested.
PVR has two big issues that prevent it from becoming even a decent stock to own for long term.
1- They are merely distributor or trader of a product (movies) whose quality and demand is highly unpredictable and totally beyond their control. So a good year of blockbuster will lift the stock price while a series of flops will sink it.
2- Very low operating leverage- You can’t keep expanding a theater or increasing prices. So your revenue per theater is capped. There is only so much you can make on food and beverages. Which means company will have to keep opening plenty of theaters to grow on an already big topline. Premiumization of theater is one option that company needs to start looking into to increase per footfall realization.
To me PVR can be a good trading stock to be bought at 20-30% correction and sold on the upmove, but as long term investment I am not convinced if it has any compounding power.
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