· Box Office revenue for PVR / Inox estimated to grow at least 30% YoY in Q4FY19 based on Hindi movie collection estimates; second consecutive quarter with over 20%YoY growth despite the failure of Thackeray and an average performance by Manikarnika. Outperformance in Eng/Hindi may drive this growth further
· Gully Boy estimated to report lifetime Box Office collection of Rs 180-200cr
· Positive surprises continue on small/medium Hindi movies as Uri becomes a blockbuster with lifetime collection of Rs 215cr; Manikarnika reports a collection of Rs 85cr whereas Thackeray disappoints with Rs 25cr lifetime collection
Detailed Write up
– Ranveer Singh and Alia Bhatt starrer Gully Boy is slated to release tomorrow across almost 3,000 screens
– As per our conversation with distributors the movie could open to a big number of Rs 18cr on the first day being Valentine day which is expected to have a positive impact of 30% approx on collections; and will catch up further over the weekend. Lifetime Box Office collection of the movie is estimated to be Rs 180-200cr which is a big number given Ranveer’s recent success with Simmba which too collected Rs 240cr in its lifetime
– The track record of Alia Bhatt too remains strong with the success of Raazi which collected Rs 122cr in its lifetime; a good performance in a solo female lead film
– In terms of recent movies, Manikarnika has collected almost Rs 85 cr and lifetime time will be around Rs 87cr which is tad below our estimate of Rs 95cr. Thackeray has given a weak performance with Rs 25 cr lifetime collection (Rs 10cr from Marathi version) much lower than our estimate of Rs 65cr. However, the big outpeformance in the last few weeks has been by Uri which has collected Rs 215cr until yesterday and lifetime is slated to be at Rs 220cr.
– Q4FY19 shall be the second consecutive quarter where in the exhibitions would report more than 20% YoY growth in Box Office revenue of all goes well for Gully Boy and other future big releases like Total Dhamaal (Ajay Devgn) and Kesari (Akshay Kumar)
– The advances for Gully Boy have also been good in the range of Rs 8cr as of yesterday; our sources in the industry who have already seen the movie on Monday have also given positive reviews about the film. Further the movie should see a good response in metros like Mumbai, Pune and DELHI circuit which account for almost 50% of the Box Office collection.
– Hindi Box Office collection is slated to grow 45% YoY to Rs 1164cr in Q4FY19; whereas Hindi BO collection growth in FY19 is pegged at 16%YoY to over Rs 3,700cr which is highest ever
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 Q4FY19 will be one of the stronger quarters as Hindi Box Office revenue is estimated to surge almost 45% YoY; we have Accumulate/Buy rating on PVR/Inox respectively with a target price of Rs 1825/Rs 390
Karan Taurani @ Elara Capital