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Movie theatres were ordered shut in the middle of March following the pandemic. (Photo: Reuters)
Movie theatres were ordered shut in the middle of March following the pandemic. (Photo: Reuters)

INOX foresees rough FY21 as first quarter a washout

  • INOX said big-ticket releases will hopefully hit screens by the third quarter of this financial year
  • Given that people are unlikely to make travel plans and have been sitting at home for so long, they will turn to the cinemas

NEW DELHI: India’s second largest multiplex chain, INOX Leisure Ltd, doesn’t have high hopes from fiscal 2021 and is looking at the next financial year to stabilise its financials.

The company reported a consolidated net loss of 82.15 crore the March-ended quarter as the film exhibition business took a hit because of the covid-19 pandemic and the subsequent lockdown. Movie theatres were ordered shut in the middle of March.

“This financial year is going to be a rough one given that the first quarter has been a washout. I would rather focus on FY22 now," Siddharth Jain, director, INOX Group said.

Jain and his chief executive officer, Alok Tandon expect the second quarter starting July to witness low occupancies as cinema halls reopen sometime this month amid a spike in cases in the country.

Revenue in January-March fell 20% year-on-year, while net profit slumped 105%.

As far as segment revenue goes, net box office declined 23%, food and beverage sales fell 24%, advertising revenue was down 20% while other revenue streams fell 12%.

Given conversations with producers within the industry, INOX said big-ticket releases will hopefully hit screens by the third quarter of this financial year. While Akshay Kumar’s Sooryavanshi is now looking at an October release, Salman Khan’s Radhe is eyeing November while Ajay Devgn’s Bhuj- The Pride of India, sports drama ’83, and Aamir Khan’s Laal Singh Chadha are looking at December.

“However, there are plenty of small films that can come before that and grow with word-of-mouth even before the festive quarter," Jain said, adding that if things normalise and audiences are receptive, he wouldn’t be a surprised if a large-scale film decides to advance its release to the Independence Day weekend in August.

The few small films that have decided to skip theatrical release and go for digital premieres are aberrations, he added.

INOX is not worried about losing too many audiences given the social distancing and limited capacity seating guidelines issued by the government. Most cinema halls in India anyway run on around 25% occupancy and the films or shows with more than 50% occupancy are few and far between.

“I think there will be a change in habits. Instead of going to a Saturday evening show, people might book for a Sunday afternoon or Monday evening when there are fewer people. So low occupancy days will turn into medium occupancy ones," Jain said.

Tandon added that given that people are unlikely to make travel plans and have been sitting at home for so long, they will turn to the movies for entertainment.

INOX plans to introduce private screenings where people can book entire auditoriums, in an effort to woo audiences back to theatres.

INOX rival, PVR Cinemas, reported a consolidated net loss of 74.61 crore for the quarter ended March. The chain’s consolidated revenues for the quarter were 662 crores compared with 846 crores during the corresponding period of last year, a drop of 22%.

“Covid-19 is an unprecedented event that has impacted people across the globe. The environment that we are operating in today is one that no one could have predicted at the start of the year. However, we are extremely confident that the business will come back stronger once the health concern due to spread of covid-19 gets controlled," Ajay Bijli, chairman and managing director, PVR Ltd said in a statement.

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