Hindi language films are facing the wrath of the audience for bad content. The trend of boycotting Bollywood on social media has also not helped matters. Against this backdrop, recent films like the Aamir Khan-starrer ‘Lal Singh Chaddha‘ And ‘Raksha Bandhan‘ Featuring Akshay Kumar has collected less than expected at the box office.
Multiplex companies PVR Ltd and Inox Leisure Ltd will also have to bear the brunt of audience dissatisfaction with Bollywood films. Nirmal Bang Institutional Equities said at 30, “Two months into Q2FY23, the performance of the material gives us a sense that occupancy levels will be the lowest that both PVR and Inox Leisure have seen during ‘normal’ times ” August report.
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PVR and Inox Leisure shares touch 52-week high 2,214.85 more 619.35, respectively, on NSE on August 4.
Analysts said the expectations were high ahead of the release of big budget Hindi films which were expected to be blockbusters. However, the movies did not live up to expectations, hurting investor sentiments for PVR and Inox, which have fallen nearly 18% from their highs witnessed earlier this month.
“With their budget and star cast, these films (Lal Singh Chaddha, Raksha Bandhan, ShamsheraAnd Ek Villain Returns) should have done better. Hence, after the recent rally, both PVR and INOX stocks have corrected,” said Jinesh Joshi, analyst at Prabhudas Lilladher.
Given this, the subscriber base and occupancy of PVR and Inox is likely to decline sequentially in Q2 FY23. According to Nirmal Bang, the cost has gone up completely and there is little scope for reduction, both the companies will be able to, at best, extract EBITDA breakeven (ex-IndAS 116).
next big releasebrahmastra‘ Will hit theaters on September 9. as ‘Vikram Vedha’ And ‘Ponniyin Selvan’ As the viewership is geared up for a meaningful increase in viewership, a lot depends on how ‘Brahmastra’ fares, say experts.
The movie content line-up for Q3FY23 looks exciting, but disappointment in this festive quarter will mean a sharp cut in earnings estimates. “With audiences being particular about content, the quality of Bollywood storylines will have to improve and this continues to be a significant upside trigger for PVR and INOX Leisure shares,” Joshi said.
Meanwhile, the PVR-INOX Leisure merger, which is crucial for both the stocks, has received approval from the Securities and Exchange Board of India and stock exchanges. Approval from the National Company Law Tribunal is awaited.
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