Indians are going to the movies to escape slowing economy: PVR Ltd

Bloomberg Mumbai | Updated on October 09, 2019 Published on October 09, 2019

Representative image   -  V Sreenivasa Murthy

PVR will probably outperform Inox on spending per head, say Analyst

PVR Ltd, one of India’s largest operators of multi-screen theatres, said that cinemas are seeing brisk business even as India’s economy slows to a six-year low and unemployment swells.

“Ever since the box-office hit Kabir Singh released in June, even films with small budgets or less-recognizable actors are drawing the crowds. The results for July-September will definitely surprise a lot of people. ivity around and people want to escape it,” said Kamal Gianchandani, chief executive officer (CEO) at PVR Pictures.

If Gianchandani’s prediction is correct, PVR would be defying a slump that has dented demand for almost everything from 7-cent cookies to cars. He joins the likes of Bollywood megastar Shahrukh Khan, who has in the past compared movies to lipstick, saying that both are immune to economic turmoil.

PVR to outperform Inox

PVR will probably outperform Inox on spending per head, analysts led by Karan Taurani at Elara Securities Pvt said.

It has also partnered with Canadian motion technology player D-Box Technologies Inc to design seats that sway and jerk in sync with the action on screen, offering a more immersive experience.

“Our strategy is to ensure we stay relevant in this age where every other day a new streaming service is being launched. Fortunately, customers are receptive,” Gianchandani said.

“PVRs business, which was hit by the cricket world cup in the April-June quarter, has revived since then. Footfalls, which rose about 20 per cent in the quarter, will remain strong, though the economic slowdown may hurt advertising, according to a report by Edelweiss Securities Ltd in August,” Gianchandani said.

PVR is trading at an estimated price-to-earnings of 43.3 times, compared with about 21 for China’s Wanda Film Holding Co.

“It is not just the content. There is something else at play that is aiding the film business. I won’t say we are happy with the slowdown, but we have no complaints because the business is doing well,” Gianchandani said.

Published on October 09, 2019
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