Why is PVR Inox stock price down today?

PVR Inox’s stock price is down by more than 1% today.  The company posted its March quarter result yesterday. This is the first result that the company has posted since the merger of PVR and Inox. It posted a net loss of Rs 333.4 crore in the quarter. 

The company will be shutting down 30 loss making cinemas over the coming months. It took a one-time impairment charge of Rs 10.58 crore on these cinemas. Another one-time write-off of Rs 10.8 crore was taken on an upcoming cinema in an upcoming Bengaluru mall. This mall project has been suspended.  EBITDA stood at Rs 263.9 crore in the quarter.  The company said that it will open between 150-174 new screens in FY 24.

The company’s stock price has taken a hit today because of some other measures. 3.05 crores visited the cinemas of the company in the March quarter. This makes it 3,38,888 viewers daily in its cinemas during the quarter. Average ticket price in the quarter came down to Rs 239 from Rs 244 in the previous quarter. This indicates that the company had to either lower its ticket prices to attract more customers or customers preferred to opt for shows or seats that were lower priced. 

Similarly, expenditure on food & beverages per customer came down to Rs 119 from Rs 133 in the December quarter. This is a decline of 11.7% on this parameter, quarter-on-quarter. Food & beverages usually are a lucrative and high margin sale item for multiplex operators. 

Two years of Covid lockdowns and restrictions changed customers viewing preferences. Many of them got used to OTT platforms. Also, watching cinema in multiplexes is a discretionary expenditure for a large number of people. Discretionary expenditures are cut down by people during times of economic uncertainty, like the ongoing one. A large number of layoffs in sectors such as IT must have adversely affected demand for PVR Inox. This is best reflected in the decline in food & beverage expenditures of customers. Quality of films being released continues to be a matter of concern. This is also a major reason why a large percentage of films that are released failed to do well at the box office, in the quarter.

 From economic reasons to quality of movies, the fortunes of PVR Inox are tied to a number of factors. That makes the stock a bit risky at this point of time. That is why its stock price is down today.