If Gianchandani's prediction is correct, PVR would be defying a slump that has dented demand for almost everything from 7-cent cookies to cars.
Business
Standard : Cinemas are seeing brisk business even as India’s
economy slows to a six-year low and unemployment swells, according to
PVR Ltd., the nation’s largest operator of multi-screen theatres.
Ever
since the box-office hit Kabir Singh released in June, even films
with small budgets or less-recognizable actors are drawing the
crowds, Kamal Gianchandani, chief executive officer at PVR
Pictures, said in an interview this month. Results for
July-September will “definitely surprise a lot of people,” he
said, declining to elaborate.
“I
think the slowdown is helping the cinema business,” Gianchandani
said. “There is negativity around and people want to escape it.”
If
Gianchandani’s prediction is correct, PVR would be defying a slump
that has dented demand for almost everything from 7-cent cookies to
cars. He joins the likes of Bollywood megastar Shahrukh Khan, who has
in the past compared movies to lipstick, saying that both are immune
to economic turmoil.
Seventeen
of 26 analysts surveyed by Bloomberg have buy ratings on PVR
stock, with eight holds and one sell. Similar numbers can be seen
for smaller Indian rival Inox Leisure Ltd. PVR will probably
outperform Inox on spending per head, analysts led by Karan Taurani
at Elara Securities Pvt. said October 4.
Sensing
competition from the likes of Netflix Inc. and Reliance Industries
Ltd.’s Jio service -- which allow people to watch movies from the
comfort of their home -- PVR has partnered with Canadian motion
technology player D-Box Technologies Inc. to design seats that sway
and jerk in sync with the action on screen, offering a more immersive
experience.
“Our
strategy is to ensure we stay relevant in this age where every other
day a new streaming service is being launched,” Gianchandani said.
“Fortunately, customers are receptive.”
PVR’s
business, which was hit by the cricket world cup in the April-June
quarter, has revived since then, Gianchandani said.
Footfalls,
which rose about 20 per cent in the quarter, will “remain strong,”
though the economic slowdown may hurt advertising, according to a
report by Edelweiss Securities Ltd. in August.
PVR
is trading at an estimated price-to-earnings of 43.3 times, compared
with about 21 for China’s Wanda Film Holding Co.
