Multiplex stock box office duds as rail, boycott calls hit earnings | Techno Glob


Stocks of theater chains are suddenly facing several headwinds, including drawing moviegoers to multiplexes amid high ticket prices, poor performance of big-budget Hindi films and even social media for some films. That includes calls to boycott.

Disappointing box office collections of much-awaited Hindi film releases such as Lal Singh Chadha, Raksha Bandhan, Shamsheera and Dubara weighed on investor sentiment in multiplex stocks such as PVR Ltd and Inox Leisure Ltd during the second quarter of the fiscal year. has been damaged.

Strong box office collections reported by multiplexes during the fiscal first quarter boosted investor sentiment, sending multiplex stocks hitting a 52-week high in August.

However, shares of PVR and Inox Lasers, headed by a merger, saw themselves drop 20% from their 20-week highs in August.

When a stock corrects 20% or more from its recent high, it enters a bear market. PVR stock has fallen from its highs 2,214.85 on August 4 on the NSE 1,795.85 on August 22. Inox lasers have fallen 20% from their record highs 619.35 from 500.25 during the same period.

Notably, footfall receipts and improved ticket prices complemented good box office collections during the June quarter, leading to strong performance for multiplexes. The same cannot be repeated in the current quarter.

Janesh Joshi, an analyst at Prabhudas Leeladhar, said that the performance in the current quarter is likely to remain soft, affected by the box office collections of Hindi films.

Elara Securities India Pvt. Analysts at Ltd., also said that slow recovery in Hindi box office collections (Hindi content) could be a potential reason for the near-term decline.

Producer and film business expert Girish Johar said, “Nowadays, viewers decide whether to watch the trailer of a movie after watching it.” of content) and behavior. , if your ticket prices are high and the content disappoints, you’ll be running to dead shows, and that will suffer on stock performance.

Of course, trade analysts like Atul Mohan are betting on upcoming releases like Brahmastra, Vikramvedha and Ram Sethu to lure audiences back to multiplex chains like PVR, which saw a 23% increase in average ticket prices during the June quarter. Saw the increase. Pre-pandemic June quarter of FY20.

Expectations around the festive season also keep analysts optimistic.

Analysts like Joshi said the pipeline remains good and stock prices are attractive.

Meanwhile, broadcasters reported mixed performance at multiplexes, led by lower advertising revenue. This is due to muted near-term growth prospects, analysts said. They said the lower advertising spend is on the back of the current inflationary environment, especially in the fast moving consumer goods segment.

Not surprisingly, Zee Entertainment Enterprises stock is down 20% year to date.

Zee Entertainment, which is investing in video streaming platforms in view of future growth prospects, however, is also looking at higher investments. Analysts attributed the June quarter’s impact on the company’s operating performance to slow revenue recovery and aggressive content investment.

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