PVR-Inox Leisure merger can trigger 15% rally in stocks, charts show

The announcement to merge PVR and Inox Leisure, two major players in the multiplex industry, pushed their respective stock prices upto 20 per cent higher Monday. Inox Leisure hit a new all-time high of Rs 563.50, crossing the prior historic peak of Rs 511.80. PVR, on the other hand, surged 10 per cent to Rs 2,010, also its 52-week high on the BSE. READ HERE

According to the deal, PVR promoters will own 10.62 per cent stake post the merger, while Inox promoters will have a 16.66 per cent stake in the combined entity with equal representation in the board with two seats each for promoter entities in a 10-member board. The combined entity will be named as PVR INOX Limited with branding of existing screens to continue as PVR and INOX, respectively. 

Fundamentally, analysts believe the merger of the two biggest multiplex players offers access to markets across geographies, substantial bargaining power across the value chain, scope for 'premiumisation', and likely cost synergies. READ ABOUT IT HERE

Let's look at the outlook for coming sessions for these two stocks:-
 

PVR Ltd (PVR)
Likely target: 15%
Upside potential: Rs 2,250

Shares of PVR are approximately 100 rupees shy from their new historic peak. The present all-time high stands at Rs 2,086.75. On Monday, the stock broke above its resistance level of Rs 1,850, indicating further upside. As long as the Rs 1,800-mark is defended, the trend could see Rs 2,250 levels, as per the daily and weekly charts.  CLICK HERE FOR THE CHART
 
Inox Leisure Ltd (INOXLESIUR)
Likely target: Rs 600
Upside potential: 15%

Inox Leisure may see a medium-term bullish trend, if the stock upholds the rally above Rs 480 levels. The rise in volumes on Monday and last Friday indicate greater interest of market participants and trading experts, shows the daily chart. The overall trend reflects a move in the direction of Rs 600 levels. CLICK HERE FOR THE CHART