A surge in the Hindi box office collection at 46 percent year-on-year to Rs 1,171 crore is the reason why brokerages are expecting a strong box office revenue growth for exhibitors.
A 46 percent surge in the Hindi box office collection in the first quarter of 2019, is expected to spell good news for the exhibitors.
While 2018 registered box office revenue of Rs 914 crore in the opening three months, 2019 has surpassed the number and stands at Rs 1,171 crore.
And that is why brokerages are expecting a strong box office revenue growth for exhibitors. Along with big films, the success of small and medium-sized movies has posted a positive surprise for the film industry.
According to a recent Elara Capital report, PVR and Inox Leisure are likely to report box office revenue growth of 45 percent year-on-year (YoY) each. PVR will also get a boost from numbers of Sathyam Cinemas (SPI), which it acquired in August last year for Rs 850 crore.
The good tidings reflect in stock prices of PVR and Inox as they surged in March by around 10 percent and 16 percent, respectively. Shares of Inox rose 33 percent in the first quarter.
As many as four films in the first quarter crossed the Rs 100-crore mark including movies like Uri: The Surgical Strike, Total Dhamaal, Gully Boy and Kesari.
Other films that contributed to the strong March quarter are Badla (Rs 77 crore), Manikarnika: The Queen of Jhansi (Rs 90.78 crore ), Luka Chuppi (Rs 82.68 crore), among others. The opening quarter also benefited from Simmba’s spillover that raked in over Rs 239 crore.
On the back of strong content, it is expected that PVR will see a footfall growth of 47 percent YoY and average ticket price (ATP) will decline 2 percent YoY.
The drop in ATP is on the back of reduction in goods and services tax (GST) rates from 28 percent to 18 percent.
Another core segment, food and beverages is estimated to grow by 58 percent YoY, led by the positive impact of strong footfall growth and lower GST rate in the F&B segment (reduced from 12 percent to 5 percent).
For Inox Leisure, advertising revenue is expected to grow 30 percent YoY led by better pricing in big Hindi movies. The report expects Inox to report revenue growth of 44 percent YoY during the quarter.
Positive on the movie exhibition space backed by a strong Hindi movie content pipeline for FY20, the report expects a double-digit footfall growth.
Regional movies can further drive box office revenue due to dubbing in Hindi languages.
PVR will announce its fourth quarter and annual results on May 10. Inox is yet to release the date.
