When action and drama fail to bring smiles, horror comes to the rescue, for the box office.
As Akshay Kumar's daring stunts in Bade Miyan Chote Miyan, or Ajay Devgn's finest performance in Maidaan couldn't attract enough moolah for the business, exhibitors were left in the dire need of a success. After a disastrous first quarter this fiscal, they counted on the September quarter releases to move the needle at the box office.
The far and few successes this year raised the alarm bells for exhibitors with some calling FY25 a horror show with the box office business and footfalls sinking below the levels reached during the pandemic.
But the prayers were answered when horror comedy Stree 2 led recovery in box office fortunes. Since its release on August 15 it has kept the cash registers ringing. The movie has become the third most profitable Hindi film in the post-Covid period with handsome returns to the makers and a box office profit of over Rs 500 crore.
Stree 2 brought the much needed respite to exhibitors including India's top multiplex chain PVR Inox which is expected to see an improvement in its September quarter performance. It is estimated to narrow its losses to Rs 26.5 crore sequentially from Rs 178.7 crore in the April-June period. The company had reported a net profit of Rs 166.3 crore in Q2 of FY24.
"Stree 2 was the standout movie in Bollywood emerging as the highest grossing Hindi film of all time, even as other movies failed to make a mark," said Pulkit Chawla, analyst at Emkay Global, who added that for PVR Inox, some pickup is expected on a sequential basis after a slow start to FY25, but revenue should be down 23 percent year-on-year (YoY) on a high base of Q2 of FY24.
Shah Rukh Khan's Jawan, Sunny Deol's Gadar 2, and Akshay Kumar's OMG 2 stole the show last year in the September quarter with record collections and the three bringing in Rs 643.87 crore, 525.45 crore and Rs 150 crore, respectively.
On the other hand, this year, Stree 2 had to do all the heavy lifting yet the film for many exhibitors managed to deliver similar business they recorded last year during the July-September period.
"After a disappointing Q1, an improved performance is expected in Q2FY25, aided by strong collections of select movies. Lack of movies again affected Hollywood’s performance with only Deadpool and Wolverine managing strong collections. Regional movies did well this quarter with Kalki 2898 AD, The Greatest of All Time, and Devara- Part 1 being the better performers," said Chawla.
He estimates PVR Inox's revenue to decline 23.2 percent on-year due to a high base of Q2 FY24. Revenue from operations is expected to decline to Rs 1,535.4 crore in Q2 from Rs 1,999.9 crore a year ago, while it is estimated to decline 28.9 percent from Rs 1,190.7 crore in Q1.
Dent in box office
Overall box office is estimated to decline 19.7 percent YoY to Rs 2,630 crore given the high base of Q2 FY24 which was the best ever quarter in the post-Covid period, pointed out Jinesh Joshi, Lead Analyst, Prabhudas Lilladher. He added that movies like Stree 2, The Greatest of All Time (GOAT), Devara (Part 1), and Deadpool & Wolverine surpassed the Rs 100 crore mark during the quarter.
August releases this year grossed Rs 1,291 crore at the domestic box office, making it the best month in 2024 for the Indian box office, noted media consulting firm Ormax's analysis.
Stree 2’s box office sales contributed to more than half of August's box office business. No other film that released in August, across languages, was able to gross Rs 100 crore at the box office. The language share of Hindi films increased from 35 percent in July to 40 percent in August, as a result of Stree 2's exceptional box office performance, Ormax analysis pointed out.
The box office for January-August releases stands at Rs 6,868 crore, down by 7.5 percent from the last year. Net Hindi box office is likely to decline by 31 percent YoY in Q2 FY25 due to a higher base of Jawan, Gadar 2, and OMG 2 last year, said Karan Taurani, senior vice-president at Elara Capital.
Little improvement
Footfalls in PVR Inox cinemas are estimated to grow 26 percent QoQ, despite a 21 percent YoY decline to 3.82 crore. The multiplex chain had reported over 10 percent decline in footfalls to 3.04 crore in Q1 FY25 from 3.39 crore a year ago.
"Occupancy has picked up pace versus Q1 because of slightly better content. Occupancy is expected at 22.5 percent led by films such as Stree 2 (box office Rs 626.27 crore), Bad Newz (Rs 70 crore), performing well at the box office, said Taurani.
Chawla said that the average ticket price (ATP) should improve to Rs 254 from Rs 235 in Q1 FY25, while spend per head (SPH) should inch up to Rs 135 from Rs 134 in Q1 FY25.
However, Taurani expects ATP to remain flat and SPH will be muted, with 1.1 percent YoY growth.
Ad revenue
Another metric which has been lagging in the post-Covid period is advertising revenue which Chawla expects to grow to Rs 105 crore from Rs 93 crore in Q1.
Ad revenue, a major driver, may be muted in Q2, said Taurani. "Going ahead, we expect an uptick in ad revenue, led by the festival season and healthy content pipeline," he added.
PVR Inox recently announced that it has secured an advertising deal for FY25 with its long-time business partner, Khushi Advertising which has a network of over 9,000 screens across various multiplex and single chains. The five-year contract with the ad firm is to drive cinema advertising sales in the South India market.
The multiplex operator also pointed out that advertising sales contributed 10-11 percent of its total revenue, but that contribution dipped to around 7-8 percent after Covid.
Screen additions
The chain opened 16 screens in the September quarter, however, net screen count is likely to
decline as the company has been culling loss-making screens on a regular basis, Emkay's Chawla said.
"Expect screen addition to be muted as PVR Inox guided for screen addition of 120 in FY25," Taurani said.
Counting on new releases
Analysts expect the festive period to turn the tide for exhibitors. "The Q3 FY25 is inspiring hope with many high-profile movies, including SkyForce, Vettaiyan, Bhool Bhulaiyaa 3, Singham Again, Jigra and Pushpa 2," said Taurani.
Chawla said that the Q3 content lineup is dominated by franchise movies along with big Hollywood movies.
"With a strong content pipeline including major releases like Pushpa 2 and Singham Again, we expect the box office buoyancy to continue," Joshi said.
The upcoming Hollywood pipeline is also normalising, as the impact of the strike by writers and actors has subsided. Q3 is expected to be the highest grossing quarter of FY25, Emkay Global said in a note.
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