Home / Markets / Mark To Market /  PVR, Inox may see nearly 40% sequential decline in footfall in Q2FY23

By now, investors in stocks of multiplex chains PVR Ltd and Inox Leisure Ltd have braced for a muted earnings performance in the September quarter (Q2FY23). Remember, in recent weeks, multiplexes have felt the heat of the boycott Bollywood trend on social media as audiences reject poor movie content.

Only Bharmastra: Part One - Shiva and Thor: Love and Thunder managed to clock collections over Rs100 crore at the box office during the quarter. On the other hand, much-hyped movies with big star casts such as Shamshera, Laal Singh Chaddha and Raksha Bandhan did not fare well.

"The NBOC’s (Bollywood + Hollywood) stood at Rs698 crore in 2QFY23 due to a string of flops in the Hindi genre," analysts at Prabhudas Lilladher said in a recent note.

As a result, the footfall at these multiplex chains was bound to take a hit in Q2FY23.

"Our checks reveal footfalls can be ~30-40% lower than 1QFY23. On a conservative basis, assuming 40% decline would mean footfalls for PVR/Inox can be in the range of 15 million/11 million respectively," the domestic brokerage house said.

The report further highlighted the profitability challenges for these companies considering that costs including rent are now at pre-covid levels.

However, after a dull second quarter, Q3 is likely to be better for these companies. The report notes that the opening week of 3QFY23 has been decent. "Vikram Vedha has clocked Rs37 crore while PS-1 has crossed Rs100 crore so far. Content pipeline for 3QFY23 is strong with movies like Ram Setu, Thank God, Black Panther and Avatar due for release," it added.

In this calendar year so far, PVR and Inox shares have rallied 29% and 40%, respectively. However, after hitting new 52-week highs of Rs2,214.85 and Rs619.350 on 4 August 2022, their stock prices have come off. On Tuesday, PVR and Inox shares were trading at Rs1,733.35 and Rs498, respectively, down over 1.5% each.

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