Multiplex stocks take a dive
Maharashtra government’s stand coming out, the stock price of PVR crashed over 13% in Friday’s market to close at Rs 1,214 on BSE, losing Rs 183 in just one session. The stock of Inox Leisure, another multiplex operator, also closed 5.4% or nearly Rs 14 lower at Rs 239. The combined loss of investors’ wealth in PVR was Rs 855 crore with its market cap now at Rs 5,675 crore, while in Inox Leisure the loss was Rs 132 crore with the market cap at Rs 2,303 crore.
The government’s decision to end dual pricing from August 1is expected to hit the revenues of multiplexes. Some brokerages estimate that on an average, multiplexes earn about 25% revenue from F&B sales and have gross margins of around 75%.
Data on BSE showed PVR had spent nearly Rs 160 crore on buying food & beverages during fiscal 2018. Its consolidated net profit for the year was Rs 124 crore. According to Batlivala & Karani, during the January-March quarter of fiscal 2018, the average price of a ticket in a PVR multiplex was Rs 209 and a person watching a movie in a PVR theatre spent Rs 87 on average on food and drinks.