PVR ends over 3% higher despite downgrade by Ind-Ra to IND AA- with Negative outlook

The credit rating agency affirmed the short-term rating on the company’s credit facilities.

Jul 22, 2021 03:07 IST India Infoline News Service

India Ratings and Research (Ind-Ra) has downgraded PVR Limited’s Long-Term Issuer Rating to ‘IND AA-’ from ‘IND AA’ on fund-based facilities. The Outlook is Negative. The short-term rating of IND A1+ was affirmed.

The company stock ended at Rs1,343.85 up by Rs43.9 or 3.38% from its previous closing of Rs1,299.95 on the BSE.

“Ind-Ra has continued to take a consolidated view of PVR and its subsidiaries while arriving at the rating, due to the close strategic and operational linkages among them.

The downgrade reflects the weakening of PVR’s financial profile in FY21, with the fall in occupancies due to the impact of the second wave of COVID-19 having led to continued cash losses. The Negative Outlook reflects the continued lack of visibility regarding a recovery in the operational parameters (occupancies, average ticket prices, and spend per head, etc.) and normalised profitability margins over the near-to-medium term, which would impact the sustainable financial capital structure of PVR,” company shared Ind-Ra’s rationale in a filing on Wednesday.

It further said, from a long-term perspective, though, PVR’s business profile remains strong, supported by its market leadership in the underpenetrated Indian movie exhibition market. Ind-Ra also derives comfort from PVR management’s proactive approach towards managing its liquidity position, exemplified by its cost-cutting initiatives and timely raising of funds (equity and debt) at competitive rates.

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