One of the highly anticipated 2023 films, Adipurush, starring Prabhas and Kriti Sanon, has hit theatres today, June 16th. Based on the epic Ramayana tale, the movie demonstrated a significant buzz among the fans, with ticket prices exceeding Rs 2,000 in cities like Delhi and Mumbai.
You must be wondering what a broker has to do if the movie becomes a blockbuster or a flop. On a serious note, we don't, but many on the field earn their bread butter from Block Buster movies. You are right; we are talking about entertainment industry stocks. To name a few like tips industry, PVR cinema, Eros etc.
In Delhi, one ticket for the Hindi version of the film in a 2D format is priced at Rs 2200, while Delhi's PVR: Vegas LUXE in Dwarka also offers tickets for Rs 2,000. Maison PVR in Mumbai also offers tickets for all shows at Rs 2,000 for Living Room, Luxe, Jio World Drive, and BKC. Despite the high prices, multiple shows are houseful in Delhi.
Advance bookings for Adipurush have reached over 1.5 million on online ticket provider Book My Show, with Hindi and Telugu leading the charts in ticket sales.
The film is expected to have a blockbuster start at the box office, and according to Sumit Karel, the collection will be anywhere in the range of Rs 80 crore-Rs 100 cr on day 1 in all languages in terms of net domestic box office collections.
So how does a blockbuster movie affect Media & Entertainment stocks?
Increased footfall and ticket sales: Blockbuster movies attract large audiences, boosting ticket sales and occupancy for theatre chains, resulting in increased revenue and a positive stock price.
Higher concession sales: Blockbusters boost ticket sales, high-margin food and beverages, and concession revenue, driving PVR's stock price up.
Licensing and distribution: Media & Entertainment stocks generate revenue from blockbuster movies through licensing and distribution, positively impacting financial performance and stock price.
Investor sentiment: Blockbuster releases generate hype, capturing the public imagination, driving investor interest in movie theatre stocks, and driving stock prices up.
Blockbusters can impact PVR's stock price through higher footfall, ticket and concession sales, licensing and distribution revenue, and increased investor interest and media coverage. Of course, the impact depends on how big the blockbuster is and how well it performs at the box office. But in general, blockbusters tend to benefit theatre chains and their stock performance.
In the last 5 days, PVR INOX Ltd is up 5.5%, Eros International Media Ltd is up 8.5%.