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Multiplex revenues to hit all-time high of Rs 6,000 cr in FY23, occupancies to fall short: CRISIL

After the pandemic lows of the last two years, multiplexes are poised to triple their revenues this fiscal, according to a new report by ratings and analytics agency CRISIL. The ratings agency projects that India’s multiplex operators’ revenues could climb to an all-time high of over Rs 6,000 crore in FY23, which is 13-15 per cent above the fiscal 2020 level.

The growth has been primarily driven by pent-up demand as “more people queue up to watch movies after the pandemic-forced hiatus”, CRISIL stated.

Theatre footfalls have improved too, with tentpole releases like RRR and Brahmastra drawing people to the big screen in hordes.

However, even though occupancy went back to pre-pandemic levels in the first quarter of 2022, it might see a slight dip for the full fiscal (FY23) as “multiplexes continue to feel the heat from OTT platforms”. Hence, a full recovery in operating margins might be unlikely, as per the report.

Naveen Vaidyanathan, Director, CRISIL Ratings, said, “Multiplexes have rebounded well from the pandemic setback and reported their highest-ever quarterly revenue and operating profit in the first quarter this fiscal. Occupancy has returned to the pre-pandemic level of ~32 per cent, riding on some big-banner releases.”

A lot of the revenue growth for the likes of PVR, INOX, Cinepolis, and others, is being driven by higher average ticket prices (ATP), which are up ~20 per cent from pre-pandemic levels, higher cost of food and beverages (F&B) and more screens being added across properties.

“Operators have been steadily hiking prices amid high inflation. Spend per head is expected to be Rs 115-120, up nearly a third from before the pandemic, driven by a mix of price hikes and a wider menu of choices to movie-goers,” CRISIL explained in the report.

Multiplexes are further expected to gain from the 8-week exclusivity window given to theatres for new Hindi movie releases, which came into effect from August 1, 2022. Despite the OTT boom, theatricals continue to account for over half of a film’s collections.

“While there have been headwinds in the past two months stemming from social media outrage and boycott calls, the scene may change in the coming months aided by the festive season and a strong content pipeline. That should improve occupancy to ~30 per cent this fiscal from 16 per cent in the last,” Vaidyanathan added. Business Today

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