Indian exhibs hope holidays worth celebrating

Dozens of films set for release during Oct.-Dec.

NEW DELHI/MUMBAI -- A long list of film releases in the festive season and a rebounding economy have Indian multiplex chains gearing for their strongest quarter of box office collections this winter in years.

The International Monetary Fund has forecast India's economy to grow 9.7% in 2010 and the Oct.-Dec. quarter -- with a series of festivals and holidays for Diwali, Eid and Christmas -- promises to set the screens on fire.

The festivities and a return in consumer spending could benefit multiplex chains such as PVR Ltd., Reliance MediaWorks, Inox Leisure, Cinemax India and Fame India after a weak spell last year.

"We had a very bad year last year and we are having a party this year," said Tushar Dhingra, chief operating officer at Reliance MediaWorks' unit Big Cinemas, referring to recent smash hits the Salman Khan-starrer "Dabangg" and Tamil superstar Rajnikanth's "Endhiran," the year's top two grossers.

"I think in the last five years this is the strongest line-up we have seen. It will be a stronger third quarter than the last three or four years at least."

A global economic downturn, security concerns sparked by the Mumbai terror attacks of 2008, and a two-month strike by Bollywood producers and distributors in 2009 had dampened show business pushing some theatre chains into the red.

"Unlike the last two years, uncertainties have disappeared from the economy and people are more secure about their jobs and want to spend more," KR Choksey analyst Abhay Amlekar said.

About 35 Hindi movies from genres as varied as comedy, drama, action and romance, and with Bollywood stars such as Akshay Kumar, Ajay Devgan, Hrithik Roshan and Aishwarya Rai are scheduled to hit the screens.

"This could be one of the greatest quarters in 3-4 years," Pramod Arora, chief executive officer at PVR said, adding the success of 'Endhiran' has already set the tone for the quarter.

Average ticket prices in the industry could rise by 7-8% said Arora, who sees a 10-12% rise in PVR's same-screen revenue for the quarter.

However, one analyst points out the absence of big star movies featuring top acts such as Shah Rukh Khan and Aamir Khan could dent earnings.

Typically, multiplexes share revenue with distributors and have the lowest share in the first week of the screening with the share rising in the subsequent weeks.

A movie with less-known actors that runs for just two to three weeks brings a smaller share of the revenue compared with big-star films that run for four to five weeks.

However, PVR's Arora is banking on films such as "Action Replay", "Golmaal 3," "Khelein Hum Jee Jaan Sey" and "Harry Potter and The Deathly Hallows."

Hollywood, though marginal to Indian cinema revenues, has about 70 films for release in the period, including 3D films such as "Tron Legacy," "Harry Potter and The Deathly Hallows," "The Nutcracker" and "Gulliver's Travels."

Angel Broking analyst Anand Shah said 3D movies fetch better margins and eye-popping effects attract larger family audiences, pushing occupancy rates higher.

Analysts expect occupancy rates to climb to 35-38%, from average of about 30% through the year since January.

Higher occupancy and ticket prices could grow revenue for the quarter by about 15%, estimates SKP Securities analyst Kamna Jain.
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