Just as investors and analysts were rejoicing the return of moviegoers in large numbers to multiplexes, the recent surge in COVID-19 cases has them worried once again.
Shares of PVR and Inox Leisure fell 2.5 percent and 3.3 percent, respectively, on the National Stock Exchange on June 6 as the Maharashtra government made masks in public places mandatory again in light of rising cases.
The state has seen a 54 percent rise in reported COVID-19 cases in the previous 24 hours, with 700 of the new 1,018 infections recorded in Mumbai itself.
The resurgence in infections has investors worried that footfalls in theatres could see a sharp fall as individuals avoid crowded places from fear of the virus.
Prior to the resurgence of COVID-19, gross box office collections in the first four months of 2022 touched a record high of Rs 4,000 crore driven in large parts by the success of some southern India-based movies.
According to a report by GroupM and Ormax, box office revenue is expected to touch Rs 12,500 crore in 2022, well ahead of pre-pandemic collection of Rs 10,900 crore in 2019, brokerage firm Edelweiss Securities noted in a recent report.
Despite the emerging concerns over footfalls, analysts remain hopeful of a strong comeback for the sector in 2022-23 led by strong collections and addition of new screens.
“We expect CY22 to be the best year so far for exhibitors from a box office collections perspective, but ad revenues remain a challenge,” Edelweiss Securities said.
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