2018 To End on a High Led by Big Release of Ranveer Singh Starrer Simmba

Ranveer Singh starrer Simmba

Simmba – Ranveer Singh Starrer movie is expected to release tomorrow 28th December, 2018 across almost 3,500 screens in India. Ranveer has had an unstable performance at Box Office except for the movies done with Sanjay Leela Bhansali; however, given Rohit Shetty’s strong track record, we expect his movie, Simmba to be a complete family entertainer for the audience.

As per our conversation with movie distributors, Simmba is expected to open with Rs 24-26cr on the day one and collect Rs 80cr over the weekend; it will have the advantage of 1st Jan being a partial holiday across the country which could positively impact collections. The music of the movie has picked up well among the audience which also may positively impact collections.  Lifetime collection of the movie is estimated to be in the range of Rs 170-180cr, however, if the word of mouth is strong it can even breach the Rs 200cr mark easily

SRK starrer Zero did not go too well for the audience due to poor content and has collected only Rs 80cr until yesterday; bad word of mouth further impacted collections negatively and lifetime should not be beyond Rs 90-95cr way below our estimate of Rs 160cr. Further, Simmba should also benefit from Zero’s failure as screen presence will shift towards the former. Regional content remains strong with the success of Robot 2.0 which was released last month and also the recent release of KGF which has reported healthy collections of Rs 93cr until yesterday; however, KGF’s Hindi language share was only 20% balance was from regional languages.

As per industry sources, all major rights (digital, music and satellite rights put together) of Simmba have been sold for almost Rs 100cr.

 As per sources in the cinema advertising segment, pricing for ad. sales of Simmba remain to be a premium in line with Thugs of Hindostan and Robot 2.0; however, our sources indicate that there have been incremental discounts given by PVR over their card rates to push inventory sales as its pricing remains at a big premium vs Inox

 In terms of BO revenue, Hindi BO revenue is estimated to grow 15%YoY in Q3FY19 to Rs 935cr led by outperformance of Robot 2.0, Kedarnath, Andhadhun and Badhaai Ho; Q4FY19 is also estimated to report strong growth of 34%YoY led by release of Simmba (larger partial impact to flow in Jan’19) , Milan Talkies (Varun Dhawan), Super 30 (Hritik Roshan), Kesari (Akshay Kumar), Lukka Chuppi (Kartik Aryan) and Gully Boy (Ranveer Singh).

Overall, Hindi BO revenue is slated to grow 13%YoY in FY19 to Rs 3,650r which is the highest ever number for Hindi Box Office industry.

We maintain our positive stance on the Indian exhibition segment with a skewed preference towards Inox vs PVR given the compelling valuation discount, better ad. Growth prospects, higher SPH growth and better scalability prospects led by higher screen addition. We maintain our view that Q3FY19 will be one of the stronger quarters as Box Office revenue is estimated to grow over 25%YoY for PVR (Ex SPI)/Inox which will also support better SPH/ad growth prospects. Further Q4FY19 too is slated to report 34%YoY growth in Hindi Box Office revenues. We also believe that failure of recent movies by Big 3 Khans is a tad positive for the movie industry as it will bring movie costs to more realistic levels and also promote new talent among producers who can now think of making content led strong films for Box Office, which eventually will benefit the exhibitors in terms of footfall.

Karan Taurani @ Elara Capital

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