Shares of newly merged multiplex giant PVR INOX climbed over 3% on Wednesday, in an otherwise weak broader market, even after the company slipped into losses in June quarter of the current fiscal due to muted growth in Hindi Box office collections as well as slow recovery in footfalls and cinema advertising revenue. The sentiment was lifted as the multiplex operator’s June quarter losses narrowed sequentially, led by an impressive growth of 70% in quarter-on-quarter box office collections for Hollywood films.
PVR INOX shares opened higher for the third straight session at 1585, up 2% against the previous closing price of ₹1,565.95 on the BSE. During the session so far, the entertainment stock gained as much as 3.07% to ₹1,614.10, while the market capitalisation climbed to ₹15,689 crore. On the volume front, around 0.8 lakh shares changed hands over the counter on the BSE against a two-week average volume of 0.52 lakh stocks.
The share price of PVR INOX touched a 52-week high of ₹2,211.55 on August 4, 2022, and a 52-week low of ₹1,336.50 on May 17, 2023.
PVR INOX was created after the merger of two leading cinema brands PVR and INOX Leisure, effective from February 6, 2023. The two entities were merged in a share swap ratio of three shares of PVR for every 10 shares of INOX.
PVR INOX, in its first earnings report post merger, reported a consolidated net loss of ₹82 crore for the quarter ended June 30, 2023, compared with profit of ₹53.2 crore in the year ago period. However, the loss narrowed sequentially as compared to loss of ₹334 crore in Q4FY23. The June quarter loss was lower than Street expectation of a loss of over ₹91 crore during the period under review.
The consolidated total revenue stood at ₹1,329.8 crore as against ₹1,002.3 crore in Q1FY23 and ₹1,164.9 crore in Q4FY23.
On the operating front, EBITDA increased marginally to ₹377.4 crore in Q1 FY24 from ₹362.4 crore in Q1FY23 and ₹285.6 crore in Q4FY23.
“The Appointed date for the merger of PVR Limited and INOX Leisure Limited was January 1, 2023. Consequently, Q4 FY’23 and Q1 FY’24 results for the company are reported on a merged basis for PVR INOX and are not comparable with earlier periods,” the company said in its earnings report released on Tuesday.
As per the company, the quarter witnessed a muted start in April, with limited movie releases in Hindi, which contribute to more than half of the box office collections. The box office picked up pace in the month of May with the release of, ‘The Kerala Story’ which turned out to be the biggest release of this quarter along with other superhits like ‘Fast X’ and ‘Guardians of the Galaxy Vol. 3’ from Hollywood, and ‘2018’ from Malayalam. The momentum continued in June with the release of ‘Adipurush’, which recorded the highest weekend admissions in 2023, but the movie did not do well post its first weekend, the release noted.
“Other movies that delivered reasonable performances were ‘Spiderman: Across the Spiderverse’, ‘The Flash’, and ‘Transformers: Rise of the Beasts’ from Hollywood. Regional movies like ‘Carry on Jatta 3’ in Punjabi and ‘Baipan Bhari Deva’ in Marathi, which were released towards the end of the quarter, have achieved remarkable record-breaking success.”
The company said that June quarter saw the release of the highest number of Hollywood movies post-pandemic, which, combined with a robust performance at the Box Office, led to an impressive growth of 70% in quarter-on-quarter box office collections for Hollywood films. The recent success of Hollywood blockbusters like ‘Oppenheimer’, ‘Mission Impossible: Dead Reckoning Part 1’ and ‘Barbie’ reaffirms our belief that audience’s enthusiasm for theatrical movie going remains intact when there is compelling content, it added.
Ajay Bijli, Managing Director, PVR INOX, said, "The exceptional performance of Hollywood movies both in terms of the increase in number of releases year on year and the box office collections during the quarter reinforces our belief in consumers love for theater-going. It’s heartening to see the blockbuster success of unconventional movies like Barbie and Oppenheimer in India, clearly indicating that audiences choose the big screen for a unique cinema experience.”
“Notably, the Hindi Box office has shown a gradual reduction in QoQ volatility, accompanied by improved performance of mid-scale Hindi movies, indicating a growing appetite for fresh Hindi content among the audiences. We strongly believe that as we progress through the rest of the year, we will witness a rising trend of Box Office across all genres,” he added.
During the quarter, PVR INOX opened 31 new screens in 5 cinemas, while it exited 14 underperforming screens across 4 cinemas as part of its cost control measures. “These planned exits form part of the guidance we had given in the last quarter. As on date our screen portfolio (including 38 management screens) stands at 1,707 screens across 361 cinemas in 114 cities in India and Sri Lanka,” the company said.
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