Ramayana’s strong box office start contrasts with Prime Focus share slide ahead of Q2 results

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Despite Ramayana grossing over ₹499 crore worldwide and marking a strong box office start, shares of Prime Focus have declined 11% amid profit booking, ongoing financial losses,…

Even as Ramayana—produced by Namit Malhotra’s listed company Prime Focus—has had a strong start at the box office, shares of the firm have declined since the film’s November 5 release, with part of the fall attributed to profit booking following a pre-release rally.

The film emerged as Ranbir Kapoor’s biggest opening ever, grossing over ₹1000 crore worldwide so far as per Sacnilk. In India, Ramayana opened at ₹64.85 crore net, marking a record for Kapoor, though lower than the ₹86.75 crore opening recorded by Prabhas-starrer Adipurush.

On the stock exchange, however, Prime Focus shares have declined about 11% since the film’s release and trade roughly 26% below their 52-week high. The stock was trading at ₹273.55, down 0.49% on the day, following declines of 3.25% over the past five days and 1.95% over the past month. It is down 0.31% over the past six months, while remaining up 19.29% year-to-date.

Part of the post-release decline has been attributed to profit booking, as the stock had more than doubled over the past year on Ramayana-related buzz and gained another 13% in the two weeks leading up to the release. On the day of the release, both Prime Focus shares and the wider entertainment sector declined.

The film's production budget is also a key factor. The two parts of Ramayana reportedly cost over ₹4,000 crore, making it the most expensive Indian film ever. Digital and satellite rights have reportedly been sold for over ₹450 crore, covering about 11% of the budget. Producers retain only a share of box office collections, and the second part of the film is yet to be released.

Prime Focus’s financial numbers have added to the caution. The company reported a ₹46 crore loss in the June quarter and has posted losses in seven of the last 10 years. Borrowings stand at around ₹5,717 crore, and the stock trades at 119 times trailing earnings.

The company’s shareholder base has also changed over the past year. Foreign investors have reduced their stake from 11% to under 3%…

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