Multiplex stocks PVR and Inox Leisure hit fresh 52-week lows on Friday's trade, following reports that production houses have moved to release their films directly on over-the-top (OTT) platforms.
With multiplex businesses continuing to struggle under the virus-induced lockdown, PVR stock on Friday fell 5.89% lower to hit a fresh 52-week low of Rs 835, while Inox Leisure declined 4.92% intraday to a new low of Rs 194 today.
Stocks of multiplex chain operators have been badly hit from the Covid-19 induced lockdown as theatre halls were the first to be shut and could be the last to be opened after the end of the current shutdown.
Besides this, multiplex Inox on Thursday expressed its disappointment over the decision of Gulabo Sitabo makers to release the film on an OTT platform.
Reportedly, multiple films will be streamed directly on the streaming platform, which includes Prime Video, Netflix, Youtube, Hotstar, Zee5, Alt Balaji, Voot, Sony Liv, Viuclip, etc.
In a press release issued on Thursday, Inox said: "INOX would like to express extreme displeasure and disappointment on an announcement made by a production house to release their movie directly on an OTT platform by skipping the theatrical window run. The decision of production house to deviate from the globally prevalent content windowing practice is alarming and disconcerting."
"INOX would like to urge all content creators not to skip the theatrical run, and stay with the age-old and established windowing pattern, which is in the best interests of all stakeholders in the value chain," the statement added.
Brokerages also expect a recovery in multiplex stock prices to be slow and occupancy levels to be lower, post the restriction ease as well.
Inox stock has fallen 5.34% in one week, 15.67% in one month and 50% year to date. Similarly, PVR shares have erased 4% in one week, 21% in one month and 55% since the beginning of the year.
ShareKhan in its report today said Inox Leisure, one of the largest multiplex operators in India is likely to get impacted in its Q4FY2020 and Q1FY2021 performance, on back of recent shutdown of movie theatres owing to nationwide lockdown due to COVID-19. The brokerage cut earnings estimates for the multiplex by 5-10% for FY2020E/FY2021E/FY2022E and also lowered target multiple, considering the uncertain times ahead.
"We maintain our Buy rating on INOX Leisure Limited (ILL) as the structural growth story remains intact," the report added.
Shares of Inox closed 3.93% lower at Rs 193.25 on BSE, and PVR share price ended 3.93% lower at Rs 853.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today