“The rating action reflects CRISIL Ratings’ expectation of weakening of PVR’s business risk profile over the medium term. Prolonged restriction on operations both in terms of time and capacity along with delayed opening of key states such as Maharashtra has led to deferment in release of hindi content impacting the overall footfalls,” CRISIL said in rating rationale.
While cinema halls have been allowed to open in majority of the states across the country, however they are operating at varied level of restrictions in terms of both time and capacity. Since Hindi content has been limited therefore regional and English movie releases have supported the operations so far, the rating agency said. CLICK HERE FOR FULL REPORT
Meanwhile, India Ratings and Research (Ind-Ra) has affirmed PVR’s long-term issuer rating to ‘IND AA-’ with negative outlook. The developments that could, individually or collectively, lead to a positive rating action include a meaningful recovery in the key operational parameters such as occupancy, average ticket prices, and spend per head, the rating agency said.
While announcing the June quarter (Q1FY22) results on July 27, 2021, PVR’s management said the company expects the movie release line-up to commence from September-end. Recovery is expected to speed up during the festive season starting October 2021, with big-budget movies scheduled for release.
The exclusive window of four weeks for multiplexes may be reduced in the current environment, but this would only be for the near term. However, the terms are expected to return to normal levels by the end of this fiscal or, at the maximum, by the start of the next fiscal, the release stated.
“A strong pipeline of movie releases and the gradual lifting of restrictions, coupled with the quicker recovery seen in most retail segments, remain keys for revival. Nevertheless, the advancement of OTT and recent capital raise could be an overplay on valuations”, the brokerage firm Motilal Oswal Securities had said result update.
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