PVR, Inox Leisure shares under pressure amid fresh Covid restrictions. Should you accumulate?
Premium- Delhi government has announced several curbs in view of the rising covid cases. The fresh order has asked cinemas to shut down
Multiplex stocks have been under pressure this week amid states announcing new curbs on the back of rising Omicron covid variant cases. Shares of PVR and Inox Leisure have declined over 6% in the past five trading sessions. The Delhi government's recent order to shut cinema will severely impact business, say analysts.
“Delhi government's decision to shut down theatres and multiplexes will certainly hit the revenues of these businesses. The greater concern is whether other governments too will follow suit as the Omicron variant spreads. The hit to the revenues of multiplexes is reflected in the reaction of stock prices," said VK Vijaykumar, Chief Investment Strategist at Geojit Financial Services.
Delhi government on Tuesday announced several curbs in view of the rising covid-19 cases. The fresh order has asked cinemas to shut down and imposed restrictions on timings of malls, markets and restaurants.
Both PVR and Inox leisure shares are around 30% off from their November highs. "There is a view gaining ground that the Omicron variant is less virulent, though fast-spreading, and therefore, might be indicating the imminent end of the pandemic. If this turns out to be true, the closure of theatres and multiplexes may be short-lived and stock prices will bounce back," Meena added.
Movie theatres had just begun to see signs of recovery as people started stepping out and spending after lockdowns in states across the country were eased amid decline in cases and increase in vaccination.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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