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INOX Leisure Ltd
INOX Leisure Ltd

COVID-19: Multiplexes stare at rough quarter

  • Edelweiss Securities Ltd estimates a 7-8% dip in footfalls at multiplexes in FY21
  • Elara Securities forecast a 12-14% downgrade in EBITDA for multiplex chains such as PVR and INOX in FY21

NEW DELHI: The Indian entertainment industry will likely take a hit as people exercise caution, avoiding crowded places, following a rise in cases of COVID-19, also referred to as novel coronavirus.

Mumbai-based financial services company Edelweiss Securities Ltd estimates a 7-8% dip in footfalls at multiplexes such as INOX Leisure Ltd and PVR Cinemas in FY21.

“Amidst the ongoing coronavirus scare, we expect footfalls at multiplexes to be impacted in the near term. While it is difficult to comment on the timeline by which we expect the pandemic to subside, we foresee risks to FY21E footfalls primarily due to the battering that could take in Q1FY21, assuming the contagion risk gradually increases in ensuing weeks," Edelweiss Securities said in a report.

For INOX, the report has cut FY20 estimated revenue, EBITDA and net profit by 4.0%, 2.5% and 3.2% respectively. It has also revised FY21E revenue, EBITDA and net profit by 7.4%, 7.9% and 22.1% and 9% respectively.

Similarly for PVR, FY20 estimated revenue, EBITDA and PAT has been revised lower by 3.0%, 2.7% and 3.5% respectively, and FY21E revenue, EBITDA and PAT trimmed by 5.7%, 6.5% and 21.2% respectively.

EBITDA refers to earnings before interest, tax, depreciation and amortization and PAT refers to profit after tax.

While the March 2020 movie pipeline is strong with two big-budget releases -Tiger Shroff-starrer Baaghi 3 and Akshay Kumar’s Sooryavanshi - footfalls could be a challenge if the disease spreads quicker than anticipated, the report said.

Earlier this week, a report by brokerage firm Elara Securities Pvt. Ltd forecast a downgrade of 12-14% in earnings before interest, tax, depreciation and amortization for multiplex chains such as PVR and INOX in FY21, thanks to the COVID-19 scare.

Bollywood, which accounts for 65% of total revenue of these chains, has major offerings lined up from April, including director Kabir Khan’s sports drama ’83, Amitabh Bachchan and Ayushmann Khurrana-starrer Gulabo Sitabo, Salman Khan’s action drama Radhe—Your Most Wanted Bhai, Akshay Kumar-starrer Laxmmi Bomb, Yash Raj Film’s Bunty Aur Babli 2 and Kangana Ranaut-starrer Thalaivi, a biopic on actor-politician Jayalalithaa.

As of now, the only film release deferred is the James Bond movie No Time to Die, which has been moved to November from April. In case the situation worsens in India, big-budget Bollywood movies could be postponed, thereby postponing multiplexes’ business to later quarters, the Edelweiss report said.

Bollywood is already on the verge of seeing one of its worst quarters. January and February saw a spate of underperforming titles like Chhapaak (at 34.08 crore), Street Dancer ( 68.28 crore), Panga ( 28.92 crore) and Love Aaj Kal ( 34.80 crore).

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