GST cut on food and beverages in cinema halls boosts PVR and INOX shares

PVR and INOX shares Leisure rose on July 12 after the government announced a cut in GST on food and beverages served in cinema halls from 18% to 5%.

The GST Council’s decision is expected to boost the revenue of cinema chains as they will be able to pass on the benefit of the lower GST rate to their customers. This is likely to lead to an increase in footfalls in cinema halls, which will benefit the two companies.

PVR shares rose 2.5% to ₹1,909.50, while INOX Leisure shares rose 2.8% to ₹293.50 on the BSE.

The GST Council also approved a proposal to reduce the GST rate on online gaming from 28% to 18%. This is also expected to benefit PVR and INOX Leisure as they operate online gaming platforms.

The two companies are also expected to benefit from the reopening of the economy and the increasing demand for movies. In the first quarter of FY23, PVR’s revenue grew by 12.5% to ₹1,243.5 crore, while INOX Leisure’s revenue grew by 10.3% to ₹890.4 crore.

The GST Council’s decision to reduce the GST rate on food and beverages served in cinema halls and online gaming is a positive development for PVR and INOX Leisure. This is likely to boost their revenue and profitability in the coming quarters.

Here are some key takeaways from the PVR and INOX shares news:

• The GST Council has approved a proposal to reduce the GST rate on food and beverages served in cinema halls from 18% to 5%.
• The new rate will come into effect from July 18, 2023.
• The decision is expected to boost the revenue of cinema chains as they will be able to pass on the benefit of the lower GST rate to their customers.
• This is likely to lead to an increase in footfalls in cinema halls, which will benefit PVR and INOX Leisure.
• The two companies are also expected to benefit from the reopening of the economy and the increasing demand for movies.

Overall, the GST Council’s decision is a positive development for PVR and INOX Leisure. It is likely to boost their revenue and profitability in the coming quarters.