The operating profit of the Indian multiplex industry could moderate 200 basis points (bps), or by ~Rs 100 crore, if half of the movie-goers to multiplexes in Maharashtra carry their own food & beverages (F&B) inside, an analysis by CRISIL Ratings shows.
Maharashtra accounts for roughly a quarter of the revenues of multiplex operators. Non-ticket segments comprising F&B and advertising are highly profitable and subsidise losses on ticket sales.
Says Sachin Gupta, Senior Director, CRISIL Ratings, “The gross profit margin of multiplexes in the F&B segment is about 75%, and in the advertising segment over 80%. In fiscal 2018, leading multiplexes reported an operating profit (EBITDA) of Rs 58 lakh per screen. Of this, the gross profit generated by the F&B segment was Rs 61 lakh per screen, while advertisements reeled in Rs 33 lakh per screen. Put another way, these multiplexes would have bled if their only source of revenue was ticket sales.”
Apart from being highly profitable, non-ticket revenues are growing twice as fast as ticket sales. The compound annual growth rate for non-ticket revenues was 29% in the past five fiscals compared with 15% for ticket revenues. As a result, share of non-ticket revenues has increased to ~43% in fiscal 2018 compared with ~30% in fiscal 2013.
