PVR, Inox Leisure hit seven-month low; tank up to 28% in a month

Shares of multiplex operators like PVR and Inox Leisure continued to remain under pressure, hitting seven-month lows on the BSE in intra-day trade on Friday after Delhi Chief Minister Arvind Kejriwal announced sweeping restrictions in a bid to break the chain of Covid-19 infections in the city.

Among individual stocks, PVR slipped 3 per cent to Rs 1,030, while Inox Leisure dipped 2.5 per cent to Rs 248.45 on the BSE in intra-day trade today. Both these stocks are trading at their lowest level since September 2020. In the past one month, PVR (down 28%) and Inox Leisure (down 25.2%) have underperformed the S&P BSE Sensex, which fell 3 per cent during the period.

As per new guidelines by the Delhi government to curb the spread of Covid-19, cinema halls are allowed to operate at 30 per cent occupancy compared to 50 per cent earlier. During the Covid-19 curfew in Delhi over the weekend, shopping malls, auditoriums, restaurants, gyms and spas will remain shut till further orders, while cinema theatres will be allowed to screen movies with 30 per cent of their seating capacities on weekdays.

Earlier, this month, the Maharashtra government had ordered shutting down of cinema halls, theatres and multiplexes for public access until further notice to bring the spread of Covid-19 under control.

This is a negative development as multiplexes register higher footfalls on weekends. With restricted timings and occupancy, analysts expect deferral of release dates of movies in April, thereby pushing the recovery expectations further. Cash burn would also increase with less/no content release.

Delhi, along with Maharashtra, is among the top two markets for theatrical business. ICICI Securities believes that restrictions in both markets rule out any new Hindi releases this month or till there is more clarity on reopening with higher occupancy.