By Karan Taurani, SVP – Research Analyst (Media, Internet & Consumer Discretionary), Elara Capital
Alia Bhatt starrer film Gangubai is slated to release across almost 3,000 screens tomorrow; the film is slated to report collections of Rs 6-7cr on day one and lifetime collections will be in the range of Rs 40-50 cr on a base case. In case of a positive word of mouth, collections can surpass our estimates by 25-30%.
In terms of negative impact, Maharashtra and Delhi – key circuits for Hindi content – approx 36% of Box Office are still open with only 50% occupancy and audience too will take some time to come back for content that may not appeal to masses
On the other hand, outperformance on regional continues as all states in south except Karnataka are open with 100% occupancy allowance; large Tamil film Valimai is slated to release Tomorrow as well and compelling advances indicate gross Box Office Rs 30cr on day one and lifetime will breach Rs 150cr mark if the word mouth holds on. TN is estimated to contribute 80% of collection for the film
We maintain our positive view on the exhibitors as we expect H1FY23 to be extremely strong in terms of net Box Office revenue (Hindi), with 22% growth vs pre Covid levels helped by release of 10-12 Hindi large budget films in the period
The Ad Revenue will remain muted as this a first film to hit cinemas post third wave and will take a few weeks of transition for that to come back to Dec'21 levels (50% recovery) ; FMCG players cutting ad spends due to RM inflation, is also a mild negative as cinema is usually the last medium for them as preference, given its small size in the ad spend pie (~1.5% of overall ad spends)
We have a buy rating with a TP of Rs 2,375/575 on PVR/Inox respectively.
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