Dear Zindagi! Multiplexes just Dangal-ed with cash ban, stare at slower Q3 topline growth

NEW DELHI: Even though movies such as Dangal, MS Dhoni and Shivaay made good money at the Box Office, the government’s demonetisation drive through November and December hit footfall at the multiplexes, which may result in some softness in their December quarter earnings.

The September-December period is generally the worst quarter for multiplexes, as footfalls get impacted by school examinations. A strong base from last year may also impact bottom lines this quarter.

“We estimate a 2-3 per cent year-on-year drop in PVR’s like-to-like footfalls during the third quarter of FY17 due to demonetisation. Further, a high base effect will also overshadow performance. Hollywood movies too were muted. Films like Inferno, Jack Reacher, Fantastic Beasts and Doctor Strange failed to arouse interest. This is likely to take a toll on top lines of multiplexes,” Edelweiss Securities said in a note.


Bollywood movies released during the quarter, such as Befikre, Dear Zindagi and Kahaani 2, each saw Box Office collections below Rs 100 crore during the quarter. Dilwale, Bajirao Mastani, Prem Ratan Dhan Payo were some of the movies that had performed pretty well in the corresponding
period last year.

Demonetisation of 84 per cent of the currency in circulation hit several key discretionary sectors of the economy. Multiplexes average 40 per cent of their total transactions in cash, which had slipped to 20 per cent by early December.

That said, brokerage firm Motilal Oswal Securities said that it expects the impact of demonetisation to be lower than its previous estimates.
The brokerage had earlier projected Inox Leisure and PVR to take a 10-15 per cent hit on top lines due to softness in occupancy rates.

FMCG, auto and consumer durables sectors cut ad spends due to demand squeeze because of the liquidity crunch.

“We estimate 10 per cent YoY growth in PVR’s ad revenues, which is lower than 28 per cent YoY growth seen in the same quarter last year,” Edelweiss Securities said.

Here’s a look at the number of releases lined up for the January-March quarter.