Media - HITS ‘N’ MISSES Q4FY18 : Content starts delivering, to spur ad growth
India Equity Research | Media
Q4FY18 extended the spectacular performance of Q3FY18, primarily led by Padmaavat, one of the biggest grossers (INR3bn plus collection) of the year. Sonu ki Titu ki Sweety sprung a pleasant surprise as it surpassed expectations and collected INR1bn. Raid and Padman were the other movies that had a decent run at the box office. Among Hollywood releases, Black Panther met with strong response. In the base quarter Q4FY17, Raees (INR1bn plus),
Kaabil (INR1bn plus) and Badrinath ki Dulhania had done well. We
estimate LTL footfalls at multiplexes to rise to low single digits in
Q4FY18 along with explosive growth in Ad revenues across multiplexes. We would closely monitor the Maharashtra government’s F&B policy for the multiplexes. \ Content finally clicking - aids footfalls and high ad growth We estimate PVR’s and Inox’s LTL footfalls to rise 2-3% YoY, respectively, in Q4FY18 due to good content. The quarter saw the release of many blockbuster movies like Padmaavat, Sonu ki Titu ki Sweety, Raid and Padman. Anticipation of good performance drives ad growth of multiplexes; blockbuster releases during the quarter would spur ad growth. We estimate PVR’s ad growth to be 27% plus YoY, with Inox likely to report 50% YoY ad growth on low base.
Screen additions to accelerate in FY19; rentals remain high PVR added 49 screens in FY18 and has guided to add 90 plus screens in FY19. Inox added 26 screens in FY18 and is set to add 70 plus screens in FY19. We estimate PVR’s ATP to increase 7% YoY, while Inox’s ATP growth is likely to increase 10% YoY in Q4FY18. Other key developments: (a) PVR added 25 screens in the quarter, taking total additions to 49 for the year; (b) revival of alternate content exhibition vertical by PVR; and (c) rental costs of multiplexes shot up due to intense competition.
Outlook: Star studded fare in Q1FY19 to give FY19 a good start Q1FY19 too has extended strong Q4FY18 run and has started on a good note with Baaghi 2 getting good response (INR1bn plus collection). Further, star studded movies like October (Varun Dhawan), Kaala (Rajinikanth), Dragon (Ranbir Kapoor) and Race 3 Abneesh Roy (Salman Khan) are also anticipated to do well. Also, strong line-up of English movies +91 22 6620 3141 [email protected] like Avengers: Infinity War, Deadpool2, Jurassic World: Fallen Kingdom and The Incredibles 2 will aid box office collections. Pertinently, the base (Q1FY18) was strong Monit Vyas +91 22 6623 3463 with releases like Baahubali 2, Half Girlfriend, Hindi Medium, Sachin - A Billion [email protected]
Dreams and Tubelight. A recent court order asking the Maharashtra government to frame an F&B policy for the multiplexes poses a threat to the revenue of multiplexes. Alok Shah +91 22 6620 3040 We would closely monitor the developments in this case. [email protected]
April 9, 2018
Edelweiss Research is also available1 on www.edelresearch.com, Edelweiss Securities Limited Bloomberg EDEL
Table 1: Movies released in Q4FY17 Table 2: Movies released in Q4FY18 Total Total Movies (INR mn) Day 1 Day 2 Day 3 Collections Movies (INR mn) Day 1 Day 2 Day 3 Collections Badrinath Ki Dulhania 123 148 161 1,154 Padmaavat 240 320 270 3,014 Jolly LLB 2 132 173 200 1,169 Padman 103 137 161 817 Raees 204 263 131 1,375 Sonu ki Titu ki Sweety 64 93 108 1,038 Kaabil 104 187 98 1,038 Raid 100 139 171 723 Phillauri 40 52 60 267 Pari 44 55 55 271 Commando 2 51 44 62 251 Hate Story 4 38 42 47 200 Rangoon 51 48 47 207 1921 16 21 28 159 The Ghazi Attack 17 23 28 190 Aiyaary 34 41 44 182 Total 5,652 Total 6,405 Source: boxofficecollection, Edelweiss research
Fig. 1: Race3 slated to release on June 15, 2018 Fig. 2: Kaala to release on April 27, 2018
Source: Industry, Edel