Multiplexes See Upside Risk From Consolidation, Says ICICI Securities
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ICICI Securities Report
Everyone knows that most new industries are fragmented, and consolidate as they mature. Indian cinema theatres, though not a new industry, but is highly fragmented.
We see Covid-19 as a catalyst to accelerate consolidation in Indian theatre chain business. Though large screen shut down is likely in single screens, it may drive multiplexes’ occupancy higher.
Our working shows 100 basis points higher occupancy will drive Ebitda higher by 9.1% and 11.7% for PVR Ltd. and Inox Leisure Ltd., respectively.
Our FY23E occupancy estimate for PVR and INOX is at 35% and 28%, same as FY20; we see an upside risk to these numbers.
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