Multiplex stocks have been under pressure this week amid new restrictions announced by states omicron covid different cases. Shares of PVR and Inox Leisure have lost over 6% in the last five trading sessions. Analysts say that the Delhi government’s recent order to close cinemas will have a serious impact on business.
“Delhi government’s decision to shut down theaters and multiplexes will definitely impact the revenue of these businesses. More worrying is whether other governments will follow suit as the Omicron version spreads. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The impact on multiplex’s revenue is reflected in the reaction of stock prices.
The Delhi government on Tuesday announced several restrictions in view of the rising Kovid-19 cases. The latest order calls for closure of cinemas and restrictions on timings of malls, markets and restaurants.
Leisure shares, both PVR and Inox, are down nearly 30% from their November highs. “There is an idea being gained that the Omicron version is less virulent, though spreading faster, and may, therefore, be a sign of an imminent end to the pandemic. If this turns out to be true, the closure of cinemas and multiplexes may be less could-survive and stock prices will bounce back,” Meena said.
Movie theaters were starting to show signs of recovery as people started venturing out and spending eased following the lockdown in states across the country, amid a drop in cases and an increase in vaccinations.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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