Top multiplex chains bank on festive season to bring cheer back

A slate of flop Bollywood movies have hit India’s top cinemas hard, leaving the industry to bank heavily on the current festive quarter to revive its fortunes

Inox and PVR, the top multiplex operators, who reported results this week, both blamed a lack of good content for lackluster second-quarter performance, and said they are betting on the third quarter to put them back on a growth track.

"Q3 is crucial (for the companies)," said Karan Taurani, an analyst at Elara Capital.

Audiences have traditionally flocked to theatres during the busy festival season, which culminates in Diwali, which will be celebrated on Monday.

Producers save the biggest films of the year for a Diwali release, and the industry expects them to do well during this period, but it may not be quite as festive this year.

"Even the Q3 releases, which happen to take place during the festive season, are somewhat muted and underwhelming in the response they are getting," film producer and trade analyst Girish Johar said.

Occupancy rates at Inox were at 17 per cent for the quarter, with PVR at 24 per cent, analysts at domestic brokerage and research firm Nirmal Bang said, blaming the lackluster attendance on "poor consumer connect with the content released in the second quarter."

In the first quarter, Inox reported a 29 per cent occupancy rate, while PVR said its rate was 33.6 per cent in the same period.

The two chains are set to merge in an all-stock deal and become the country's largest exhibition company with 1,546 screens across 109 cities.

"We all know that occupancy is related to the content which we are showing. And we have some major challenges with the content in Q2," Inox Chief Executive Alok Tandon said in an earnings call on Wednesday.

In addition, the rise of streaming services like Netflix and Amazon Prime during the Covid pandemic has combined with growing Bollywood fatigue among younger generations who view many of its movies as outdated and unfashionable.

Ram Setu (The Bridge of Lord Ram) and Thank God are the two main Bollywood releases scheduled for next week, both starring actors who have proven to be a hit at the box office in the past.