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The box office is back with a bang, and the Diwali fervour is only adding to its sparkle in recent years. Sample this: Box office collections have been growing 20% in the past two years, with Diwali weekend collections alone crossing the bumper Rs 100-crore mark in the past four years. This Diwali’s cracker of an offering, Krrish 3, has raked in about Rs 21 crore on Friday, two days before the festival of lights.
So much is the importance given to a Diwali release that last year the producers of Jab Tak Hai Jaan and Son of Sardaar (both released during Diwali) were engaged in a tussle over screens. It’s another matter that both films grossed over R100 crore in the first weekend itself. But backed by better content and digitisation, cinema multiplex chains are sustaining better pricing power in recent years, with or without Diwali.
As per KPMG India estimates, the domestic box office collections, valued at Rs 8,000 crore in 2012, have been growing over 20% the past two years and could yield Rs 14,200 crore value potential by 2017. Though still heavily under-screened, the domestic theatrical market is paused for major expansion as cinema chains look at scaling up presence. The overall film industry revenues also grew from Rs 9,290 crore in 2011 to Rs 11,240 crore in 2012, representing a y-o-y increase of about 20%, and are expected to touch Rs 20,000 crore revenues by 2017.
“Box office revenues have been climbing more than steadily over the past year on the back of attractive content. With footfalls returning to the big screen, the occupancy rates are also holding up at 30-35%. One can expect most players to have much better numbers going forward,” said Smita Jha, leader, media and entertainment, PricewaterhouseCoopers India.
This is being reflected in the profits of multiplex chains like PVR and Inox, which together control over 50% of the total multiplex screens.
PVR’s Q2 numbers delivered a robust 89.7% year-on-year topline growth to R365.7 crore, mainly on account of consolidation of Cinemax. Even on a standalone basis, the cinema chain reported 32% y-o-y growth in top line to R237 crore, and 46% y-o-y growth in net profit to R22 crore on the back of good performance in the movie exhibition business. On the operating front, the company’s Ebitda margin expanded by 110 bp y-o-y to 19.9%. Consequently, consolidated profit grew