Home / Industry / Media /  Multiplex revenues to exceed pre-pandemic levels in FY23: Report

Multiplex industry revenues will exceed pre-pandemic levels of FY2020 by 6-8% in FY2023, according to credit rating agency Icra. Higher average ticket prices that are up 10-15% in FY2023 compared to pre-pandemic levels, and 30-35% higher spend per person on food and beverage will enhance total revenue growth.

Despite revenue and margin growth, current occupancy levels (at 27-29%) remain below pre-pandemic levels of 32-33%. The industry had a great start to FY2023, with occupancy levels of 32% in the first quarter of FY2023, Icra said. While occupancy decreased sequentially during the second quarter due to a lacklustre content line-up, occupancy is likely to rise in coming quarters due to a solid content pipeline and favourable consumer sentiments about watching movies in theatres.

The return of the eight-week window between theatrical and digital premiere like pre-pandemic days, beginning in August 2022, is likely to be beneficial to exhibitors. Overall revenues and operating margins are likely to rise in the second half of FY2023, thanks to a recovery in the high-margin advertising business, which underperformed pre-pandemic levels by 35-40% in the first half of FY2023. In comparison to operational losses in the previous two years, the industry profitability margin is predicted to be 14-16% for the full fiscal FY2023.

“The film exhibition industry has witnessed a healthy rebound in performance in FY2023, evidencing that the cinema experience continues to have a pull on the consumers. Given the healthy content pipeline in the coming months and encouraging consumer sentiments towards watching movies in theatres, after a hiatus forced by the pandemic, the occupancy levels are expected to improve in H2 FY2023," Ritu Goswami, sector head, corporate ratings, ICRA, said in a statement.

The outlook revision to stable from negative reflects Icra’s expectation that occupancy will touch pre-covid levels in the ensuing 12-month period. With recovery in footfall, higher ATP supported by premiumization of screens, higher SPH and recovery in advertising business, the positive operating leverage are expected to play out, leading to improvement in profitability margins, she added.


Lata Jha

Lata Jha covers media and entertainment for Mint. She focuses on the film, television, video and audio streaming businesses. She is a graduate of the Columbia School of Journalism. She can be found at the movies, when not writing about them.
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