PVR Q4: Your box-office savings are turning this multiplex into a flop show

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At the time when you are watching latest blockbuster movies from the comfort of home and spending on OTT platforms, mediaplex operators are sweating over rising losses. This is visible in the latest quarterly result of PVR, which reported a net loss for the fifth straight quarter.

The company on June 2 posted a consolidated net loss of Rs 289.12 crore in the quarter ended March 31, 2021. It had reported a loss of Rs 74.49 crore in the same quarter of last fiscal. Total income during the period under review stood at Rs 263.26 crore against Rs 661.78 crore in the corresponding quarter a year ago.

“FY 2020-21 was one of the toughest years for the multiplex industry and the company was able to successfully navigate the challenges on account of Covid-19 through a continuous focus on reducing fixed costs and keeping adequate liquidity on the balance sheet,” PVR said.

Shares of the company have underperformed the benchmark equity indices during the past one year. The scrip has gained 38% to Rs 1,323 on June 2, 2021 from Rs 954.52 on the same day last year. On the other hand, the BSE Sensex has gained 53% to 51,849.

What’s next?

Market watchers believe that the opening up of the economy and increased vaccination push will drive PVR in the near term. ICICI Securities has a ‘Buy’ rating on PVR with a price target of Rs 1,531.

On the other hand, Edelweiss Securities also thinks that cinemas to recover in line with new content and improving consumer sentiment. Positive developments on vaccination drive are likely to further boost confidence in producers as well.

“We remain positive on PVR’s long-term growth picture,” Edelweiss said, while retaining a ‘Buy’ rating on PVR with a price target of Rs 2,045.

OTT threat

Management believes that blockbuster releases on OTT is a temporary experiment and there is no significant structural threat to the multiplex industry. According to PVR, advertisement revenue will resume with recovery in footfalls and there will be no discounting of rates. As of now, 24 Bollywood films, 16 regional films and 16 Hollywood movies are in the pipeline.