Macro Economy

Multiplex footfalls to halve in 2-3 months

Our Bureau Mumbai | Updated on March 17, 2020 Published on March 17, 2020

A precipitous drop of over 50 per cent is expected in multiplex footfalls in the next two-three months, particularly for those located in retail malls of tier-1 and tier-2 cities.

According to Suman Chowdhury, President-ratings at Acuité Ratings and Research, box office collections are expected to drop substantially in the upcoming quarter, he said.

“Typically, the holiday season of April-June is the peak time for big movie releases; however, the latter may get postponed due to the Covid-19 crisis. It is estimated that box office collections have already declined y-o-y over 10 per cent in January-February 2020, and this is likely to get worse in Q1FY21. This will lead to a substantial drop in quarterly EBITDA for listed multiplex players such as PVR and INOX,” said Chowdhury on Tuesday.

Fall in footfalls

The spill-over effect of the Covid-19 crisis on the Indian film exhibition is likely to be very significant over the next three-four months, he added.

“While the reported number of infections in India stand as of now at over 125, and mortalities have been limited, the Centre and the State governments have already initiated strong measures to stem the expected spread of the virus. The measures include an embargo on public events, shutdown of schools, malls and other places of public activity by an increasing number of state governments. All these measures and the increased risk of contagion in public spaces is expected to lead to a very sharp drop in footfalls in the multiplexes, particularly those in malls,” he added.

Revenues to be hit

Revenue will be down at least 40-50 per cent y-o-y this quarter and will be a ‘complete washout’ owing to the outbreak of the coronavirus, as this necessitated closure of cinemas till the end of this month, said Mohan Umrotkar, CEO, Carnival Cinemas.

The ‘weak movie line-up’ in January and February is another factor, he added.

“It is unfortunate that business is affected so much, but human life is of most importance. Necessary precautions are a must in these times of crisis. We may not get the desired revenue this quarter, but it will come in the subsequent months. As a business model, we have a fixed overhead. So, that’s a loss if the cinemas go vacant for a longer period of time,” Umrotkar said.

On Sunday, five apex bodies of the entertainment industry decided to stop shootings till March 31.

Published on March 17, 2020
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