Brahmastra, Laal Singh Chaddha and Avatar — movies that can determine the fortunes of INOX and PVR

• March 2022 turned out to be the best months for both PVR and INOX Leisure due to stellar movie releases.
• The companies can still replicate the March success due to the strong movie pipeline set up for this year.
• “2022 or financial year 2023 will be one of the best for the Indian film industry,” INOX CEO Alok Tandon said.

Afer a stellar March business, movie theatres are hoping to make a comeback — but they need movies that can move the audiences away from OTTs and TVs.

This is the view held by five brokerage firms — ICICI Securities/Direct, Motilal Oswal, Prabhudas Lilladher and ShareKhan. They believe that good movies can help them replicate the March success which came with superhits like the controversial Kashmir Files; Rajamouli’s RRR, Sanjay Leela Bhansali’s period drama Gangubai Kathiawadi, followed up by KGF 2 in April.

“They witnessed a March — which was the best ever in the history, led by superlative performances of movies,” ICICI Direct said in its views on PVR and INOX both. The March footfalls made up for half of the Jan-March quarters footfalls in theaters.

But both these companies need more than a good month to turn things around. A strong recovery in footfalls and sales of these listed theatre companies will be driven by ‘strong content slate lines’, as per ICICI Direct. If all goes well, it estimates that both these companies can cross their pre-covid earnings in the current financial year.

These companies are in desperate need of a ‘recovery worthy’ movie releases. In spite of a good revenue growth, INOX and PVR both are still in the red — posting losses of ₹239 crore and ₹478 crore in the fourth quarter, respectively.

The Khan-Karan factor

The next phase of turnaround can come from another set of long-delayed and much-hyped movies with A-list stars. All the three Khans have movies planned this year — which had become a rare occurrence even in the years before the pandemic.

Aamir Khan has Lal Singh Chaddha, that’s a remake of Tom Hanks’ Forrest Gump. Salman Khan also promises another movie from his formulaic stable — called Kabhi Eid Kabhi Diwali. The King of Khans — Shah Rukh Khan too is releasing a movie after four years called Pathan.

The fact that these Khan movies are ‘much-awaited’ can help drive footfalls. INOX CEO Alok Tandon spoke of an influx of good releases in FY23, in a conversation with Business Insider India.

“2022 or financial year 2023 will be one of the best for the Indian film industry… I feel like we have some very, very strong lineup,” Tandon said. He also confirmed that March was their best month yet and the movie business had been operating in limited capacity over the last few years due to Covid-19.

Then other bankable stars like Ranveer Singh and Ranbir Kapoor too have releases this year — at least one of them is bankrolled by Dharma Productions, lead by Karan Johar.

Movies that can move PVR, INOX Leisure’s profits from red to green

Badly in need of a superhit

The many high profile releases must deliver as per expectations with ‘superhits’, for the companies to get back to their pre-Covid financials and footfalls.

“Deterioration of content quality might affect footfalls and advertising revenue growth, inability to take adequate price hikes at the right time might affect earnings given rising input cost, and inability to maintain cost savings initiatives likely to impact operating profitability,” a ShareKhan report read.

A lot of high profile releases also fell flat in the months ahead of March. There was a big buzz around Ranveer Singh and Deepika Padukone-starrer 83 — which was based on the 1983 cricket world cup that India won. However, it disappointed movie distributors as it was declared a theatrical flop. Singh’s Jayeshbhai Jordaar too did not live up to its expectations.

Kangana Ranaut’s Dhakkad, Akshay Kumar’s Bachchan Pandey, Prabhas’ Radhe Shyam too failed to impress the audiences. Apart from 83, all the other movies were released after India had overcome the third Covid-19 wave.

Pushpa and Spider Man in the Hindi belt — both released in December along with 83 — were among the few movies that managed to do well despite Omicron fears.

SEE ALSO
Mukesh Ambani gets his ‘richest Indian’ crown back with a wealth of $104.4 billion
INTERVIEW: INOX Leisure to hire 3,000 people as it plans to add 77 new screens
India created 14 unicorns in the first half of 2022 — before funding slowdown hit them