Credit ratings agency CRISIL had reaffirmed its rating on the long-term bank facilities and non-convertible debentures of the multiplex chain operator at 'CRISIL AA'.
The ratings agency had removed the ratings from 'Rating Watch with Negative Implications' and assigned 'Negative' outlook on the same.
CRISIL has also assigned its 'CRISIL PP-MLD AAr/Negative' rating to Rs 50 crore long-term principal protected market linked debentures (MLDs) of PVR.
Offering the rating rationale, the ratings agency said that rating action follows the issuance of guidelines by the Ministry of Home Affairs on September 30, 2020 for Unlock 5.0 wherein cinemas are allowed to resume operations from 15 October 2020 with a cap of 50% occupancy outside containment zones.
However, multiplex operators would need permission from State/ Union Territory governments to open cinemas in their respective regions, which would continue to be a monitorable.
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The reaffirmation of the rating on the debt instrument factors in strong liquidity profile maintained by the company supported by the rights issue and also the company's ability to curtail operating costs while its operations were shut.
At the same time, the negative outlook reflects CRISIL's expectation of the potential weakening of the company's credit profile over the next 3-4 months if local restrictions at various states hinder opening of operations on a pan-India basis or occupancies remain muted despite resumption of operations.
'Lower-than-expected ramp-up in occupancies, resulting in continued higher cash losses, would remain a key rating sensitivity factor,' CRISIL said.
PVR is a film entertainment company, engaged in the motion picture exhibition in cinemas. It reported a consolidated net loss of Rs 225.73 crore in Q1 June 2020 compared with net profit of Rs 17.53 crore in Q1 June 2019. Net sales during the quarter slumped 98.6% year-on-year (YoY) to Rs 12.70 crore.
The scrip was up 0.42% at Rs 1267.80 on the BSE. It traded in the range of 1266.05 and 1284.30 so far during the day.
On the technical front, the stock is currently trading above its 50-day and 100-day simple moving averages (SMA) placed at 1241.67 & 1127.42, respectively. However, the scrip has managed to continue to trade below its 200-day SMA placed at 1322.21.
The scrip's RSI (relative strength index) stood at 53.909. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.
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