June 5, 2023 – PVR INOX Ltd experienced a gain of over 2 percent in its shares following the announcement of a new 7-screen multiplex in Bengaluru. This move has strengthened PVR INOX’s presence in South India, bringing their total screen count to 530 across 95 properties.
The recently unveiled multisensory 4DX auditorium is situated in Global Mall, adjacent to Nayandahalli Metro Station. Boasting a seating capacity of 1189, the auditorium features last row recliners, as mentioned in the company’s filing with the stock exchange.
As of 12:15 pm, the stock was trading at Rs 1,440 on the NSE, marking a 2.8 percent increase compared to the previous close. At that time, trading volumes reached 421,750 shares, slightly below the 20-day average of 600,844 shares.
In a bid to explore innovative technologies, Ajay Bijli, the Managing Director of PVR, expressed his enthusiasm, stating, “We are thrilled to expand our presence in Bengaluru, a rapidly growing, inclusive, and cosmopolitan city in India… As part of our merger synergies, we are actively pursuing an accelerated rollout of screens in key markets while also venturing into untapped territories.”
Following the merger of PVR and Inox, the combined entity reported its first quarterly figures in May. Unfortunately, the results proved to be disappointing, with the multiplex chain incurring a loss of Rs 333 crore for the quarter ending in March 2023. Furthermore, revenue from operations amounted to Rs 1,143 crore.
As part of their strategic approach, PVR-Inox has unveiled plans to shut down approximately 50 cinema screens within the next six months. These screens either operate at a loss or are located in malls that have reached the end of their lifespan. The company has accounted for accelerated depreciation charges and has written off the value of these assets. Additionally, merger-related expenses have impacted the company’s bottom line.
While the majority of analysts maintain a positive outlook on the stock, cautious sentiment is emerging due to the company’s dependence on successful movie releases for its profitability. In April, Elara Securities downgraded the stock to a ‘reduce’ rating, setting a target price of Rs 1,510.
“The risk of a lower EBITDA CAGR of 11 percent over FY20-25 (three-year CAGR, excluding the Covid shutdown) compared to the pre-Covid CAGR (FY17-20) of 25 percent continues to pose a concern,” the firm cautioned.
About PVR INOX:
Former competitors PVR and INOX Leisure successfully finalized their merger in February 2023, establishing themselves as the largest cinema multiplex chain in the country. They now operate a total of 1,689 screens, which accounts for a significant portion of India’s estimated 9,000 screens. The combined entity, known as PVR INOX, boasts an extensive presence with 361 cinemas located in 115 cities across India and Sri Lanka.
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