SENSEX NIFTY
May 06, 2009, 04.49 PM IST | Source: CNBC-TV18

Producer-multiplex tiff hurting industry: Mukta Arts

Ravi Gupta, Advisor, Mukta Arts, said, that the tussle between the multiplexes and producers is having an impact on the company as well as the industry. “A lot of production companies that have either completed or nearing competition products, are suffering due to this.” The costs for both, production houses and multiplexes, has gone up, he said.

Ravi Gupta, Advisor, Mukta Arts

Ravi Gupta, Advisor, Mukta Arts , said the tussle between the multiplexes and producers is having an impact on the company as well as the industry. “A lot of production companies that have either completed or nearing competition products are suffering due to this.” The costs for both production houses and multiplexes has gone up, he said, adding that though both parties had moved closer to an agreement over the issue, there still was a gap in negotiations.

The industry, he said, also wants to resolve this issue but it certainly wants a resolution that is fair to both parties.

Hoping that this would get resolved soon, Gupta said, “It is in the interest of the multiplex owners as well as the producers to resolve it and we have never considered this as an issue of them-versus-us.”

Here is a verbatim transcript of the exclusive interview with Ravi Gupta on CNBC-TV18. Also watch the accompanying video.

Q: There has been no resolution that has come out form the meeting that was held yesterday. What impact would this tiff between multiplexes and producers have on your company in particular and also the industry on the whole?

A: As far as our company is concerned, we are waiting for at least two of our releases immediately. The first—Paying Guest—we are proposing to release that as earlier as possible. In fact, tomorrow is Paying Guest’s music release and we are realising the music in the hope that as soon as this impasse is resolved, we would be able to release the film hopefully in the month of June. Yes, it certainly is creating an impact on a lot of production companies that have products that are either complete or nearing competition.

As far as the industry is concerned—it also wants to resolve this issue but it certainly wants a resolution that is fair to both parties. Unfortunately, although both the parties have moved closer together, we still are some distance from actually shaking hands and closing the issue. We are hopeful that this would get resolved soon because it is in the interest of the multiplex owners as well as the producers to resolve it and we have never considered this as an issue of them versus us.

For us it has always been an issue of the industry together. So I think a resolution is in the interest of everybody.

Q: The interest in this getting resolved is not restricted to investors but to obviously a wider audience. What exactly is the gap that has to be covered? What is the first week, second week and third week sharing that distributors want and what is the gap to be covered in terms of negotiation?

A: At the moment the producers certainly want 50%, 45% and 40% i.e. 50% week one, 45% in week two and 40% in week three as against that the multiplexes have come up to 50%, 40% and 30%. Therefore there is a bit of gap yet to be fulfilled but globally as you may be aware, globally it is generally 50% in all weeks.

The issue of costs on both sides is what is really causing a lot of problems because production costs have gone up over a period of time. Costs for multiplexes are also high and one of the worrying factors which I see it at least is that a lot of multiplexes have gone and made tie-ups on real estate at a time when real estate was at its peak. So therefore their real estate costs have been very high.

Probably what they really need to do is to renegotiate those costs because most of these multiplexes are on lease basis. So I think if they try to attempt to do that then they would be able to manage the cost better because at the end of the day the industry wants that the wealth that is generated is retained within the industry rather than moving to the real estate sector.

Q: Could you also tell us a little bit about your results this time over? You have seen that drop in revenues as well as in your bottomline – you have incurred a loss. Could you highlight your segmental revenues?

A: On the annul basis we have done pretty well. In terms of topline, we have about Rs 167 crore which has been a very significant growth, but yes the bottomline has dropped as compared to the earlier year and this is largely to do with the fact that our film Yuvvraj did not perform at the box office as we had hoped. So therefore since a very chunk of our topline and bottomline is dependent on the film and its performances – in the last quarter we did not have any release, so therefore in the last quarter results this year’s compared to the last quarter results of the earlier year where we had film released but in this quarter of this year we did not have any film released.

So therefore you see that drop and also because as I said one of the major films that we expected would do much better at the box office did not do well. So we are probably did take some hit there.

Mukta Arts stock price

On September 02, 2014, Mukta Arts closed at Rs 28.20, down Rs 0.1, or 0.35 percent. The 52-week high of the share was Rs 44.95 and the 52-week low was Rs 25.60.


The latest book value of the company is Rs 52.78 per share. At current value, the price-to-book value of the company was 0.53.

Set email alert for

ADS BY GOOGLE

video of the day

See Sensex at 30K by Aug; like autos, banks: Nomura

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.