karan taurani: High ticket, food prices in multiplexes could be maintained until the end of the year: Karan Taurani

“From June, it will be necessary to monitor whether these types of ticket and food prices can continue or not. But there is a good chance that it will continue towards the end of this calendar year because April, May, June is not the end in terms of the slate, ”says Karan TauraniSenior Vice President, Elara Securities.

It turns out to be an abundance problem. There is RRR. There is the first IPL game. Which one are you booked for?
I think I’ll go for the IPL but I’m sure the movie is going to be phenomenal. I think the reviews have been really great for the movie. We expect an opening of nearly Rs 120 crore and looking at the first week and lifetime collections, it could be in the range of Rs 450 crore and Rs 750 crore respectively.

So the point is that this is going to be the only movie that’s likely to come close to Bahubali 2 records. I think there’s very low probability or chance in terms of Bahubali 2 breaking records because Bahubali had a lot of repeated weeks that may not happen for this film and Bahubali was the second part of a particular franchise.

Nevertheless, these are very good times for exhibitors. This is the first film that will arrive without any restrictions. It’s a big movie that actually has a three week gap because the next big movie won’t be released until April 14th. There is a good run for the movie without any sort of competition from any other content.

But viewers are still a little reluctant to return to theaters. Watch 83. It’s already on OTT. I hope it won’t play out with RRR.
I don’t think so because there’s clearly some kind of content that should only be seen in theaters and we’ve also seen what’s happened with movies in the past. So if the content is compelling and if the content is on a large scale like Spider Man, the steps are going to do wonders as far as cinema is concerned.

RRR is usually a movie that will also be viewed a lot in 3D and that’s why the higher ticket price will also have a positive impact on the box office collection. But what the success of Kashmir Files has done is it’s put an end to this whole debate about OTT cinema, because if people can actually go and catch a movie like Kashmir Files in such large numbers – it probably reaches Rs 200 crore collection till yesterday – so there’s no looking back at all for the cinema.

Do you think these ticket prices over Rs 2,000 are sustainable as we have seen F&B prices increase significantly as well. More importantly, do you think the pipeline of films planned for the coming months will continue to grow?
Ticket prices may just be a short term phenomenon as things have opened up after a while and if ticket prices are able to sustain two to three months from now then that is very good news and we’ll probably see a lot of upgrades in terms of theater inventory because that’s something we haven’t clearly factored in.

What is the hierarchical order in the multiplex sector? PVR, Inox – which one do you bet on?
In March, we are witnessing a recovery of nearly 35% growth in terms of box office receipts. You have to compare this to March 2019 because March 2020 also had a negative impact in terms of Covid. So we expect 35% growth in 2022 compared to March 2019 and going forward in April and May that number will increase further because the pipeline is huge.

We have great sequel movies lined up on a weekly basis and that number might even go up to 40-45%. Finally, in terms of pecking order, we like both Inox and PVR. We have a buy rating on both of these counters. We also recently upgraded the stocks.

We have a target price of Rs 2,375 on PVR and Rs 575 on Inox. As I mentioned, there is potential for upgrades beyond these target prices mainly due to two factors; the first is that the ad spend recovery happens faster and the second is the per capita spend hold that is there.

Due to this pent up demand, due to the fact that now many markets like Maharashtra, Delhi have allowed 100% capacity, the average ticket price, overall spend, do you think the movie players listed are beating records as things have normalized?
Yes, so they broke records. In the October-November-December term, Spiderman, Pushpa, and 83 entered. We have seen ticket prices and spending per person trending towards 20-25% from pre-Covid levels. And the idea at the time was that these trends may not be sustainable, but currently, because of the RRR, the levels are back again.

The point to be made here is that from June onwards one has to watch whether this kind of ticket prices and food prices can sustain or not. But there’s a high probability that it will continue towards the end of this calendar year because April, May, June is not the end in terms of the slate because the slate is so huge right now that I think this could also extend into December.


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