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Just weeks after hitting their lifetime high, stocks of multiplex majors PVR Cinemas and Inox Leisure witnessed one of their worst single-day falls on Friday as a new strain of coronavirus ‘Omicron’ and fear of fresh restrictions spooked investors.
Share price of India’s largest multiplex chain PVR Cinemas dropped more than 10 per cent to close at ₹1,390.55 apiece on BSE, down from ₹1,560.35, a day earlier. It even tested an intraday low of ₹ 1.370.80.
Likewise, stocks of the country’s second largest movie exhibitor Inox Leisure were down over 8 per cent to close at ₹377.90 apiece on Friday.
First week rally
In the first week of November, both PVR Cinemas and Inox have touched their 52-week high of ₹ 1,838 and ₹466.10 betting on a strong box-office recovery due to big bang Diwali releases including Akshay Kumar’s Sooryavanshi and Rajinikanth’s Annatthhe and a strong line-up of theatrical releases in the coming months.
“The news of a new variant of Covid-19 has sparked fears for multiplex stocks as they would be one of the worst affected if the government announces lockdown or even restrictions to curb the spread of the virus,” said Ajit Mishra, VP - Research, Religare Broking Ltd.
“The sector, after a gap of nearly 18 months, was seeing some traction led by the reopening of theatres in key markets and a strong content lineup. However, if the new variant is as deadly as it seems then it would be a tough road ahead for multiplex stocks going forward,” he added.
However, market experts also believe that with massive vaccine coverage across the country, things may not be that bad for the film exhibition industry this time regarding Covid-19.
“A major reason for the sharp drop (in multiplex stock prices) is renewed concern on fresh Covid strain being witnessed in Europe. However, we do not feel there is undue reason to worry as 29 per cent of the Indian population is fully vaccinated and the number of Covid cases is declining with each passing day,” said Jinesh Joshi, a research analyst at Prabhudas Lilladher for Institutional Equities.
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