PVR to direct INOX’s show in Kovid-19 ’22

While Maharashtra has banned gatherings of more than five people in public places from 9 pm to 6 am, it has said that theaters will continue to operate at 50% capacity. Maharashtra is the top market for multiplexes. Some analysts feel that the night ban imposed has created negative sentiment for multiplexes. Rising cases will raise investor concerns about subsequent shutdowns or sanctions. Needless to say, if this happens, the anticipated recovery for the multiplex may be delayed.

Unfortunately, even in 2022, it is important to track the impact of the pandemic. The multiplex sector has been painfully exposed by the ongoing crisis. Small wonder, PVR and Inox Leisure have suffered due to the pandemic. The consolidated net loss of PVR and INOX for the half-year ended September 2021 was approx. 373 crore and 210 crores respectively.

Meanwhile, the savings are that the film pipeline ahead remains encouraging. Plus, the recent box office performance of Spider-Man: No Way Home indicates that movies in theaters could potentially make a strong comeback based on content. Regional film Pushpa: The Rise is also doing well at the box office. In short, stalled demand appears to be strong. It also eases the concerns around over-the-top (OTT) platforms to some extent.

Some analysts believe that Inox’s position is better due to greater room for improvement in performance metrics. Also, Inox’s balance sheet is relatively strong. As of 18 October, INOX was net debt-free. PVR’s net debt as on September 30 was 914 crores. “We maintain our preference for Inox Leisure, given the strength of its balance sheet. While PVR is a leader in this space, we believe the discretionary business should be financed conservatively,” said analysts at JM Financial Institutional Securities after the September quarter results. To be sure, for multiplexes A strong recovery is possible once normalization takes place, which should positively impact these stocks as well.As things stand, PVR and Inox Leisure shares have almost recovered from their respective pre-Covid highs seen in early 2020. 38% and 26% are down. In 2022, the pandemic will test the pace of recovery for multiplexes.