Corona Impact: Multiplexes to seek relief from Centre
Battered by the coronavirus outbreak in the country, the multiplex industry in India is expected to approach the Centre for a relief package, including deferment of certain taxes.
At present, the sector is one of the worst hit by the coronavirus (Covid-19) pandemic. While footfalls had started to recede from February-end due to the lean season, the health scare has worsened the economic condition.
Besides, many state governments have ordered closure of multiplexes in the wake of the Covid-19 outbreak in the country.
Industry insiders contend that restricted cash flows and mounting incremental costs such as rentals and operational expenses have left the sector in an untenable financial position.
Consequently, the industry is likely to seek immediate tax relief, among other measures, which it will propose to the government.
Nevertheless, the lean movie season with barely any major Indian or foreign film release has somewhat mitigated the opportunity cost that the industry currently faces.
However, on standalone level, major chains such as INOX have welcomed the government's safety moves and cited full compliance with these measures.
"Assigning top priority to health and well-being of our guests, we will fully respect and follow the government's directives to keep the cinemas closed as a preventive measure," Multiplex major INOX's Group Director Siddharth Jain told IANS.
"Currently, we are not ascertaining the impact on the business... Once the situation normalises, and movie releases get back on schedule, we are sure that our guests will start thronging the cinemas like they always do," Jain added.
In a statement, Mohan Umrotkar, CEO, Carnival Cinemas, said: "Definitely Covid-19 has affected the businesses immensely. March has been impacted badly as compared to last year, so was the last quarter.
"This quarter is completely washed out and shall be down at least 40-50 per cent as compared to last year. First because the movie line-up was weak and then the Covid-19 impact in March. It is unfortunate that the business is affected so much, but human life is of most importance.
"As a business model, we have a fixed overhead so that's a loss if the cinemas go vacant for a long period of time."
Rating agency Acuite expects a precipitous drop of over 50 per cent in multiplex footfalls in the next 2-3 months, particularly for those which are primarily located in retail malls at Tier I or Tier II cities.
"Typically, the holiday season of April-June is the peak time for big movie releases; however, the latter may get postponed due to the Covid-19 crisis," said Suman Chowdhury, President (ratings) at Acuite Ratings and Research.
"It is estimated that box office collections have already declined YoY by over 10 per cent in Jan-Feb 2020 and this is likely to get worse in Q1 FY21," Chowdhury said. IANS