GST may lead to better operating profit margin for multiplex operators

Multiplex companies—PVR Ltd and Inox Leisure Ltd—are expected to benefit from the implementation of the goods and services tax (GST). That’s mainly on account of the input tax credit on fixed costs that these firms bear such as rent, common area maintenance and so on. Ratings agency Icra Ltd estimates that input tax credit will be available on 33% of the total operating expenses. The GST rate has…