Expectations high as Bell Bottom ends Bollywood’s dry run in halls

A large Hindi film – Akshay Kumar’s ‘Bell Bottom’ – finally hits cinemas tomorrow after 18 months since the pandemic struck us. Expect reasonable traction in COVID-19 times, writes Karan Taurani, VP - Research Analyst (Media & Consumer Discretionary), Elara Capital.

Akshay Kumar starrer ‘Bell Bottom’ is expected to release across 1,500-1,800 screens today, August 19, 2021 (this is half as compared to the pre-COVID-19 times, wherein such a large film would release across 3,500-4,000 screens) and estimated to open with Rs 6-7 crore on day one and estimated to report lifetime collection of Rs 60 crore; these are net Box Office collections Ex Maharashtra (which has not opened up), which contributes almost 20%-25% of Box Office in pre-COVID-19 times. The lifetime numbers could be revised upwards basis Maharashtra opening up (our checks suggest Maharashtra should open towards 1st week of September) and film hitting screens there as well; expect more producers to announce large film release dates basis performance of ‘Bell Bottom’.

The windowing of the film has been fixed for 4 weeks, which is half of the pre-COVID-19 times (6-8 weeks) and the distributor shares are higher by almost 8%-9% vis-a-vis pre-COVID-19 times (average of 55% vs 47% earlier for a large film). The collection assumptions are on the lower side (almost 65%-70% lower vis-a-vis the earlier films of Akshay Kumar, which reported lifetime Box Office of Rs 180-200 crore) conservatively primarily due to:

1) Night curfew in most states

2) Maharashtra state not being open

3) Some audience may wait a little more before going to the cinemas

4) 50% occupancy cap in all states wherever it has opened

Trends in other markets indicate that with good content, audience is comfortable going to cinemas and regional films (Punjabi and Telugu) have opened up to full house with 50% occupancy cap in the first weekend and healthy occupancy numbers on weekdays, too, post that, indicating signs of Box Office coming back to 50% of pre-COVID-19 collection on an overall basis in the near term; we believe this is a very promising sign as these numbers are only post 2-3 weeks of cinema opening in India post the second wave and despite multiple restrictions. Hollywood content has not fared well primarily due to Maharashtra state being shut as the latter contributes almost 35%-40% of Box Office for English content.

We maintain our view that over the next six to nine months, larger films across genres will release and collections for these, too, will breach towards 60% of the pre-COVID-19 times primarily helped by:

1) Larger portion of population (middle and upper middle class) being vaccinated with two doses

2) Relaxation on restrictions (night curfew)

3) Uptick in the festive season towards Diwali/ Christmas

4) More screens being allowed to open; this is in line with our view that India will surpass global Box Office trends as globally Box Office has breached towards mere 40%-45% of the pre-COVID-19 collections, despite 90% of the screens being open since last six months

Fear of the outbreak of third wave of COVID-19 and increased restrictions/ lockdown remain to be the only overhang for cinema recovery in the near term. We maintain our medium to long term positive stance on exhibitors and have a BUY rating on PVR/Inox with a Mar’23 TP of Rs 2,100/ Rs 520, respectively.