The big picture’s not so rosy for multiplex theatres next year
Pathaan and Jawan and Ranbir Kapoor’s Animal are expected to have bumped up revenues for multiplexes by 20-24% in FY24. But for the upcoming financial year, Crisil expects revenue growth to slow to 10- 15% to ₹7,300 crore despite a lineup of movies such as Allu Arjun’s Pushpa 2 and Ajay Devgn’s Singham Again.
The operating performance of multiplex theatres had improved as moviegoers returned in big numbers after two years of covid-induced disruption. Occupancy surged to 25% in FY23 from 16% in the year before, but remained below the pre-pandemic level of 30-32% in FY20.
“Robust performance of several big-budget Hindi movies such as Jawan, Gadar 2 and Animal, and healthy performance of regional films should drive occupancy higher on-year to 26% (in FY24)," Naveen Vaidyanathan, director, Crisil Ratings, said in a statement. “With movie producers aligning better with audience preferences and a stronger regional film pipeline, occupancies should remain at 26-28% next fiscal and over the medium term," he added.
Even so, competition from video-streaming, or over-the-top, platforms will continue to pose challenges for the cinemas. With viewers having the option to watch new movies on these platforms after an eight-week exclusivity period for theatres, multiplexes will need a supply of high-quality films offering a large-screen experience to improve occupancy levels.
Multiplexes are also looking to keep their operating costs in check to boost their operating margin and cash flow, which would be more than adequate to fund spending on adding new screens and refurbishing old ones, Crisil said. The rating agency added that multiplex theatres are likely to spend ₹600-800 crore annually over the next few years to add a net 100-120
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