Why this multiplex company hit 52-week low?

Country’s largest multiplex chain PVR Inox touched a 52-week low of Rs 1403.40 on Tuesday, May 16. It recovered a bit an closed at Rs 1,433.30. Actually, PVR Inox, which is a new company formed after the merger of PVR and Inox, has declared its results for the first time. And the results have been very disappointing as the income of the new company has increased more than 2 times but at the same time the losses have also increased by 3 times.

PVR Inox losses in Q4 went up from Rs 95.6 crore 3X to Rs 285.7 Crore. However, the company’s income has increased by 111% i.e. 2.1 times to Rs 1164.7 Crore from Rs 552.6 Crore and the company has returned from operating loss to operating profit. The company has earned a working profit of Rs 26.9 crore as against the working loss of Rs 17.8 crore in the same period last year. In contrast to the poor results, the management’s commentary has given some relief to the investors of PVR Inox. Management has announced to add 150-175 new screens in FY24. This means that the company will continue with capacity expansion. It has also been said that 50 cinema screens will be closed in next 6 months.These are those screens which are in loss or are in malls that have completed their life cycle and there is no hope of their revival. Apart from this, the board has also approved to raise Rs 100 crore through NCDs. Maybe that’s why at the end of trading, the stock closed with recovery from the day’s low.

Overall, share market in India closed with decline. Nifty ended at 18,286 with fall of 112 points. Market opened on the positive note but as the day went on, index continued trading in red and loss increased by the end of session.