Home / Markets / Mark To Market /  Brahmastra can't be the super-weapon for PVR, Inox

Shares of multiplex chains PVR Ltd and Inox Leisure Ltd were down 5% each on Friday, a day when Brahmastra: Part One — Shiva released. Investors were nervous amid mixed reviews for the much-awaited Ranbir Kapoor and Alia Bhatt starrer. However, reports now indicate that the box office collections have improved, breaching the key 100 crore mark. By Tuesday, shares of both companies recouped the losses and were just slightly lower than where they were before the film’s release.

For multiplexes, rising movie collections point to better footfalls. Multiplexes have of late felt the heat of the boycott Bollywood trend on social media as audiences reject poor movie content. Therefore, how Brahmastra fared was paramount. However, despite Brahmastra’s heavy-lifting, PVR and Inox are unlikely to replicate the solid show of Q1FY23 earnings performance in Q2FY23.

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“Brahmastra’s rising collection figures provide a temporary relief. It is only the second movie in Q2FY23 to cross the 100 crore mark, after Thor: Love and Thunder. This compares with four-five movies crossing the 100 crore mark in Q1FY23," said Jinesh Joshi, analyst at Prabhudas Lilladher. “We don’t think Brahmastra alone would be able to plug the gap of a series of flops of the previous two months," he said.

The next big Bollywood movie is Vikram Vedha, scheduled to release on 30 September. Tamil movie Ponniyin Selvan: I is also slated for release on the same date. The line-up for Q3FY23 includes Black Panther: Wakanda Forever, Avatar: The Way of Water and Chanakya.

With Q3FY23 being the festive quarter, hopes of a meaningful improvement in footfalls are running high. It remains to be seen whether these movies curb the impact of the boycott Bollywood trend, a crucial near-term monitorable.

Meanwhile, PVR and Inox stocks would also be on investors’ radar for their merger, which is expected to bring synergy benefits. However, a sustained long-term improvement in earnings performance of multiplex chains depends on consumers’ behaviour. It is important for audiences to redevelop the habit of watching movies in theatres, instead of OTT platforms, according to Edelweiss Securities Ltd. “In the wake of a dry run in July and August, PVR and Inox face potential cuts in full-year FY23 estimates, by us as well as Street," said an Edelweiss report dated 12 September. So far in FY23, shares of PVR and Inox are down by 1-2.5%, while the Nifty 500 index has risen by 5.2%. For now, both the stocks could be on a weak footing.

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