PVR, INOX hit year high

NARAYANAN V Chennai | Updated on September 23, 2021

Analysts caution investors on rich valuations

Stocks of leading multiplex chains PVR Cinemas and Inox Leisure hit their 52-week high on Wednesday as the ‘unlock theme’ is gaining momentum amid a sharp decline in fresh Covid cases, increasing vaccine coverage and growing prospects of theatre reopening in Maharashtra.

The stock of PVR hit a 52-week high of ₹1,632 in intra-day before closing at ₹1,566 on the NSE. PVR’s stock prices have rallied around ₹230 or over 17 per cent since the beginning of the month. Similarly, Inox Leisure also touched a 52-week high of ₹384 on Wednesday before closing at ₹359.55. The stock rallied 11 per cent from the previous day close.

“Multiplex stocks are rallying on the back of the unlock theme. With markets at excessive valuations, but the bulls in total control, operators need only excuses to push up prices and the unlock theme has come in as a good excuse,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Maharashtra re-opening

Industry watchers and market analysts also said the prospect of theatre reopening in Maharashtra, which is the largest territory for Bollywood films, is one of the major factors that is driving the current rally.

“There are news reports that the Maharashtra government is considering reopening of malls and cinemas from October 1 and that is the main trigger for the rally in multiplex stocks,” said Kranthi Bathini, Equity Strategist-WealthMills Securities Pvt Ltd. Barring Maharashtra and Kerala, all states have allowed theatre reopening either fully or at 50 per cent capacity. Earlier, the Multiplex Association of India urged the Maharashtra government to reopen theatres on “urgent basis”, claiming that the exhibition industry has suffered losses of ₹4,800 crore.

Published on September 22, 2021

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