Corona Virus Fear Starts to Crater Box Office

Corona Virus Fear Starts to Crater Box Office

Baaghi-3 negatively impacted by 35% due to Corona Virus. It was expected lifetime collection of Rs 160 Crores vs earlier estimate of Rs 190 – 200 Crores (can go lower if situation worsens).

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English movie releases postponed; expect large Hindi / Regional releases too to follow suit based on weekend performance of Baaghi -3.

Box Office revenue growth for Q4FY20 for exhibitors estimated to be flattish YoY as of now can be worst if movies (Sooryavanshi & Angrezi Medium) are postponed; FY21 performance may see a big negative impact too as Q1FY21 (flooded with big releases) was slated to be the biggest growth driver for full year FY21 performance.

baghi3

PVR/Inox stock prices have corrected 20%/25% over the last two weeks, which largely factors the Corona Virus negative impact for next 6 to 8 weeks.

Tiger Shroff starrer Baaghi 3 is slated to release today across almost 3,000 – 3,500 screens all over India. Our interaction with distributors/traders indicate that advances for the movie have got negatively impacted by 35% due to corona virus fears pan India. Llifetime expectation for the movie has been revised downwards from about Rs 200 Crores earlier to Rs 160 Crores as now. However, if the situation were to worsen in terms of footfall, the collection can fall further for Baaghi -3. The earlier franchises – Baaghi 1 (2016)/Baaghi 2(2018) have collected Rs 76 Crores/ Rs 161 Crores.

baghi3

Taapsee starrer Thappad which has got reasonable response in terms of content has reported a decline in collection on weekdays which too are some signs of footfall getting impacted due to the virus. The weekend performance of Baaghi-3 will be a key deciding factor for other large releases getting postponed. Global releases like James Bond Film – No Time to Die has been postponed from April’20 already. There is a higher likelihood that Hindi films too will follow suit based on the 30 cases in pan India today.

Thappad

Q4FY20 is turning out to be one of the worst quarter since last two years as Hindi Box Office is slated to grow mere 1%YoY to Rs 1,195 Crores due to a below par performance by recent releases like Shubh Mangal Saavdhaan & Bhoot. We believe this will translate into flattish Box Office revenue growth for Q4FY20 based on Hindi content alone. Success of regional/ Hollywood genre will lead to higher YoY growth in Box Office revenue for exhibitors. The number in Q4FY20 will further face a downward revision if the other releases like Angrezi Medium and Sooryavanshi were to get postponed.

As per our earlier reports, performance of full year FY21 for Hindi Box Office was strong based upon the performance in Q1 as the latter was estimated to contribute 33% of the full year Box Office. However if the larger movies like Sooryavanshi, 83 Biopic, Coolie No.1 were to postpone dates, it would have a big negative impact on the Q1 and full year FY21 performance.

Sooryavanshi

Further, postponement of these multiple large releases will impact their collection even at a later period ,as this will result into multiple large movies clashing at Box Office due to a relatively packed pipeline until Dec’20; clash of large movies in our view impacts Box Office opening weekend negatively by almost 15%-20% as compared to a solo release due to a fight over screens, unless the movie content is very compelling and goes into running for more than four weeks which are exceptional cases.

We believe regional industry too will follow suit if Hindi movies are postponed and this may effectively create a shut down like situation for cinemas as smaller movies, if continue to release will not be able to make up for the losses

Karan Taurani @ Elara Capital

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