PVR, Inox Leisure gain as cinema halls to reopen in West Bengal from Oct 1

Shares of multiplex companies, PVR and Inox Leisure, were trading firm in the morning deals on Monday as West Bengal Chief Minister Mamata Banerjee said on Saturday that cinema halls and open-air theatres will be allowed to operate in the state from October 1 with a limited number of participants. 

"To return to normalcy, Jatras, Plays, OATs, Cinemas & all musical, dance, recital & magic shows shall be allowed to function with 50 participants or less from 1 Oct, subject to adherence to physical distancing norms, wearing of masks and compliance to precautionary protocols," the chief minister said on Twitter.

Cinema halls have remained shut since the nationwide coronavirus lockdown began in late March. 

At 09:38 AM, shares of PVR Ltd was trading over 7 per cent higher at Rs 1,180. The stock hit a high of Rs 1,184.85 in the opening deals. It had hit an all-time high of Rs 2,081 on February 20, 2020. Inox Leisure, on the other hand, climbed 8 per cent to hit a high of Rs 274.75 on the BSE against Friday's close of Rs 254.3. 

In comparison, the S&P BSE Sensex was trading 371 points, or 1 per cent higher at 37,760 levels. 

For the quarter ended June 2020, PVR suffered a consolidated loss after tax of Rs 226 crore. The revenues in Q1 FY21 totalled Rs 55 crore as compared to Rs 887 crore in Q1 FY20 due to the outbreak of Covid-19 and consequent lockdown. Consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss for the quarter was Rs 73 crore as against a positive EBITDA of Rs 285 crore in the same period last year. READ MORE

"We continue to maintain our positive stance on the multiplex space and retain our ACCUMULATE rating on PVR by raising our target EV/EBITDA multiple to 12x (earlier 10x; LPA is 12x) as recent rights issue of Rs 3 billion evades near term liquidity concerns and reduction in fixed opex burn to Rs 220-250 million per month indicates that cash drain will be lower till the time multiplexes are shut," Prabhudas Lilladher had said in a note dated September 16.