Imax (IMAX) Looks Forward to Speed-Up Its Expansion Plans for India
Imax IMAX has announced that it is planning to speed up expansion plans in India as it witnessed healthy growth in box office collections in 2022. Its box office collection was up 41% in 2022 from 2019 with Avatar: The Way of Water becoming its highest-grossing movie in India.
As COVID-19 restrictions are being lifted and people are back at the theaters for leisure, revenues in the Indian cinema tickets segment are projected to reach $416.40 million in 2023, indicating an annual growth rate of 2.63%, per Statista.
To utilize this opportunity, Imax, which currently operates 23 theaters in India, plans to add six more screens in 2023 and seeks to touch the 100-screen mark in the next five years in India.
It will also focus more on the Indian local content as the box office from local content rose to 30% in 2022 from 2% in 2019 due to major hits like Ponniyin Selvan-1 and Brahmastra. To aid its portfolio of homegrown content, Imax has already scheduled the release of 10-12 local films in 2023 such as Shah Rukh Khan’s Pathaan and Prabhas’ mythological film Adipurush.
Local content from such renowned stars, who haven’t been seen on screen for a long time due to COVID-19 restrictions, could gain traction from Indians and boost ticket sales at Imax.
However, Imax is going to face tough competition in India from the two leading theaters of the country, PVR and INOX. Very recently, the National Company Law Tribunal approved the merger of INOX and PVR, which will make their presence in the country even stronger and pose a serious threat to the market share of Imax.
Streaming Players to Hinder Imax’s Proliferation Plans
Though theaters are witnessing a revival after the pandemic, it is seen that the streaming players have already captured a large audience during the pandemic and are making their best efforts to retain them.
Per Mint, the OTT market in India is huge and is estimated to grow from $2.6 billion in 2022 to $11 billion by 2030.
A streaming player like Lionsgate (LGF.A) has acknowledged this opportunity and recently announced its plans on improving content on Lionsgate Play for subscribers in India by adding ten Indian originals to its library in 2023 and offering dubbing in six different regional languages, which will help its content reach the masses in smaller towns.
Amazon’s AMZN Prime Video also launched a miniTV service in 2022 within its Amazon shopping app that provides short content to viewers in India. The unique feature of this is that all the content is available to viewers at zero cost. This differentiator could help Amazon gain traction from the audience.
IMAX Corporation Price and Consensus
IMAX Corporation price-consensus-chart | IMAX Corporation Quote
These OTT platforms could hinder the expansion efforts of Imax and, hence, they could fail to generate impactful returns on the heavy investments it is strategizing toward India.
Shares of Imax have declined 12.1% year over year compared with the Zacks Consumer Discretionary space's fall of 27.5%.
Zacks Rank & Stock to Consider
Imax currently has a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the same sector is Liberty Global LBTYA, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Global’s share price decreased 24.4% year over year.
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