Inox Leisure, PVR surge up to 17% on reopening of cinemas from October 15

Shares of multiplex operators like Inox Leisure and PVR rallied up to 17 per cent on the BSE on Thursday after the government allowed reopening of cinemas, theatres and multiplexes from October 15.

The central government has permitted reopening of cinemas from October 15 with up to 50 per cent of seating capacity outside containment zones adhering to the Standard Operating Procedure (SOP), which will be issued by the I&B Ministry.

Among individual stocks, Inox Leisure surged 17 per cent to Rs 318 on the BSE on the back of over four-fold jump in trading volumes. A combined 1.2 million equity shares have changed hands on the counter on the NSE and BSE till 09:21 am.

Shares of PVR rallied 15 per cent to Rs 1,395 on the BSE. A combined 1.8 million equity shares have changed hands on the counter on the NSE and BSE so far. In comparison, the S&P BSE Sensex was up 1.2 per cent at 38,528 points.

“The reopening of cinemas across the country with 50 per cent of capacity is a positive for multiplexes while permission from state governments will be necessary to reopen cinemas in respective states (In Maharashtra, Tamil Nadu, cinemas will remain shut in October). Release slate of upcoming movies and initial response from moviegoers hold the key to a faster recovery,” ICICI Securities said in a note.

"We continue to believe PVR is a proxy play on urban/semi urban discretionary spends but near term outlook remains hazy. Current liquidity of Rs 550 crore (including undrawn limit of Rs 150 crore), post rights issue will ensure liquidity in prolonged lockdown. We will closely track the reopening of cinemas in India amid Covid-19 and turn buyer only when we witness footfall revival and stability. The tail of pandemic remains the most important factor," the brokerage firm said in report dated September 15, 2020.