Shares of multiplex chains surged on March 25 as the much-anticipated SS Rajamouli's big-budget movie RRR opened in cinemas, with both PVR Ltd and Inox Leisure Ltd stocks hitting over a 25-month highs.
Inox Leisure Ltd hit Rs 479, a level last seen on February 26, 2020, while PVR Ltd rose to Rs 1,839, which it last hit on February 28, 2020, on the BSE.
At 11 am, Inox Leisure was up 6 percent at Rs 468. The stock has gained in five of the past six sessions and has advanced nearly 17 percent. Year to date, it has gained 34 percent. PVR rose 3 percent to Rs 1,827 a share. Since 7 March, the stock has surged nearly 22 percent and has climbed 41 percent this year.
"A robust revival is on the cards for the multiplex industry. Cinemas have now reopened pan-India and most key states are permitting full occupancy. Multiplex ticket prices are up 14 percent, with similar recovery across cities. Declining share of single screens remains an opportunity, Edelweiss Research said in a note to investors.
Investors have continued to buy multiplex stocks amid releases of films like Jhund, The Kashmir Files, Bacchan Panday and now RRR. Easing of Covid restrictions is also expected to bring more audience to cinema halls hit hard by the coronavirus outbreak.
"Major recent films have done well. With schools reopening and kids receiving vaccinations, going to the cinemas, as a family, will begin gaining traction again. Maintain ‘buy’ on PVR, Inox,” Edelweiss said in its report.
Analysts said the spend per head (SHP) and average ticket price (ATP) have both already gone beyond pre-Covid levels.
After the success of Telugu action-drama Pushpa in other languages —the Hindi dubbed version fetched more than Rs 107 crore—southern producers have been looking at a pan-India market.
Diversification, with alternate content and better F&B offerings, will help boost revenue, they said. INOX has partnered with Kitchens of India by ITC to offer Indian cuisine and expand its menu.
Said to be made on a budget of at least Rs 300 crore, period drama RRR has Ram Charan and Jr NTR in the lead with Alia Bhatt and Ajay Devgn among the other stars.
Reports said the movie, released in Telugu, Tamil, Kannada, Malyalam and Hindi, is expected to see a record box office opening.
Based on the prices seen on BookMyShow, a ticket for RRR at PVR Directors Cut, Ambience Mall, Gurugram, is going at Rs 2,100.
Made on a small budget, Vivek Agnihotri’s The Kashmir Files, which has triggered a debate and come under fire from some sections over alleged misrepresentation of facts, has raked in Rs 200 crore after it was released on March 11.
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