Filmmaker Karan Johar recently shared insights into his decision to sell a 50% stake in Dharma Productions to Adar Poonawalla, the Serum Institute chief. Speaking at the CNBC-TV18 Global Leadership Summit, alongside Poonawalla and producer Siddharth Roy Kapur, Karan revealed that the move was driven by the need to enhance profitability and self-fund more projects, particularly mid-budget films.
Karan explained that previously, for large-scale films like Brahmastra, Dharma had to collaborate with studios, which meant sharing profits despite the films’ success. “The real issue with funding was that we always had to partner with an existing studio on the bigger films,” he said. With the new investment, Dharma can own its films entirely, allowing for better revenue retention. However, he admitted that for mega-budget films costing over ₹250-300 crore, external support would still be essential.
Karan emphasized his focus on middle-budget films, typically costing ₹65-80 crore, as they deliver higher profit margins. “The cost-to-profit ratio in these films is significantly better. They’re easier to fund independently, and the returns are more immediate and substantial compared to high-budget productions,” he said.
Reflecting on the challenges of big-budget ventures, Karan noted that while films like Brahmastra grossed ₹420 crore on a ₹400 crore budget, the recovery process is lengthy and margins are slimmer. He added, “Everyone assumes that bigger films make bigger money, but that’s not always true.” Instead, Karan plans to prioritize mid-budget projects such as JugJugg Jeeyo and Bad Newz, which he believes offer a better balance of cost and profitability.
This strategic shift marks a new chapter for Dharma Productions, with a clear focus on sustainable growth and maximizing returns through smaller, impactful ventures.
