Malayalam cinema's mid-year report card: Big winners restore confidence after Mollywood's dull start

When 2026 began, the Malayalam film industry was already grappling with concerns over its financial health. The discussions surrounding the reported losses of nearly ₹520 crore incurred by producers in 2025 continued to dominate industry conversations. Those anxieties only deepened as the first two months of 2026 unfolded, with the box office witnessing little momentum and most releases struggling to attract audiences.

Even a slate of much-publicised films that arrived early in the year failed to spark a sustained revival. Among them, Roshan Mathew and Vishak Nair's ‘Chatha Pacha’ emerged as one of the few bright spots. The film generated some buzz, performed better than other movies at the box office, and was easily January's highest-grossing Malayalam release, earning over ₹30 crore worldwide. However, in terms of profitability, ‘Prakambanam’, made with a relatively modest budget and a less star-driven cast, did better, delivering some good returns on investment by collecting nearly ₹24 crore.

Despite these isolated successes, the industry's overall fortunes remained bleak. Week after week, new releases continued to falter at the box office, including Jeethu Joseph's ‘Vallathu Vashathe Kallan’, which failed to make a significant impact despite the filmmaker's reputation. By the end of February, the picture remained largely unchanged. A total of 36 Malayalam films had hit theatres during the first two months of the year, but only around five managed to register any meaningful box office success, adding to the prolonged dry spell that continued to haunt the industry.

Just as the industry was hoping for a turnaround, another challenge emerged. The Iran-Israel conflict sent shockwaves across the Gulf region, a key overseas market that has traditionally contributed a significant share of Malayalam cinema's box office revenue. The uncertainty triggered widespread speculation that several major releases would be postponed, including 'Aadu 3', which many in the trade believed had the potential to end Mollywood's prolonged dry spell.

Contrary to those expectations, the makers of 'Aadu 3' chose to stay the course. Directed by Midhun Manuel Thomas and starring Jayasurya and Vinayakan, the film arrived in theatres on its originally scheduled release date and went on to become one of the key releases that helped revive theatrical business from March onwards.

Producer Vijay Babu told Onmanorama that the team was aware of the risks posed by the geopolitical situation but decided against delaying the film because they were confident in its content. In hindsight, he believes that decision played an important role in restoring momentum to the industry.

"There were definitely concerns because the Gulf is a crucial market for Malayalam cinema. But we were confident about the film, and we also saw it as an opportunity. Most of the other big releases had moved out of the window. If we had also postponed, what would have been the state of Malayalam cinema? Someone had to step forward and test the market," he told Onmanorama.

According to Vijay Babu, the absence of competing big-ticket releases worked in the film's favour, while audiences, who had been waiting for an engaging theatrical experience after months of underwhelming releases, responded enthusiastically. Although the conflict affected collections in parts of the Gulf, particularly in regions closer to the conflict, the shortfall was largely offset by strong performances in other overseas territories, including North America and Europe. The film also enjoyed an impressive theatrical run, maintaining strong occupancy until the release of ‘Vaazha 2’ around two weeks later, further signalling that audiences were ready to return to cinemas for the right film. As per industry trackers, including A B George, the film collected ₹53 crore in India net alone, while it crossed over ₹60 crore in collections worldwide, making it the first Malayalam movie of 2026 to collect over ₹100 crore in worldwide collections.

The revival gathered pace over the next few months, delivering some of Malayalam cinema's biggest successes of the year and transforming what had begun as a sluggish 2026 into one of renewed optimism. April, in particular, emerged as a good month, with a string of back-to-back hits drawing audiences back to theatres.

Leading the charge was ‘Vaazha 2’. While the original ‘Vaazha’ had performed well in the domestic market following its 2024 release, its sequel exceeded all expectations, emerging as one of the year's biggest blockbusters till date. The film crossed the ₹200-crore mark at the global box office, becoming only the fifth Malayalam film to achieve the milestone. Featuring social media stars Hashir H, Alan Bin Siraj, Ajin Joy and Vinayak V, the film struck a chord with younger audiences through its relatable humour and coming-of-age themes, making it one of the most popular Malayalam releases of the year.

Almost a week later came another sequel, ‘Mohiniyattom’. Released with relatively little pre-release hype, the film, which was the sequel to Saiju Kurup’s ‘Bharatnatyam’ turned into one of the year's surprise successes, grossing more than ₹50 crore worldwide. Its remarkable theatrical run and the conversations it generated even after its OTT debut highlighted the growing appetite for well-made, content-driven cinema irrespective of scale. Riding on the film's success, the makers have already announced a third instalment, ‘Bharatanatyam 3’.

Interestingly, April saw only nine Malayalam releases - fewer than March's 13 - but it recorded significantly stronger footfalls thanks to consecutive blockbusters such as ‘Vaazha 2’ and ‘Mohiniyattom’. The industry was expecting the momentum to reach another level with the release of ‘Patriot’, billed as the most expensive Malayalam film ever made and headlined by Mohanlal and Mammootty. However, the film failed to live up to its enormous expectations. Mounted on a reported budget of around ₹140 crore, ‘Patriot’ managed to collect only around ₹80 crore worldwide, making it one of the year's biggest commercial disappointments.

May maintained the industry's improved momentum despite witnessing only 13 releases. The biggest winner was Jeethu Joseph and Mohanlal's ‘Drishyam 3’, which became a mega blockbuster by grossing around ₹240 crore globally, reaffirming the enduring popularity of the franchise. It was followed by ‘Athiradi’, starring Basil Joseph, Tovino Thomas and Darshana Rajendran, which also registered a respectable theatrical run and added to the positive sentiment surrounding Malayalam cinema.

Not every high-profile release, however, found success. Abhinav Sundar's much-awaited ‘Mollywood Times’, which opened in early June and headlined by Naslen, failed to meet expectations and collected less than ₹20 crore at the box office, according to Sacnilk estimates.

In contrast, ‘Balan: The Boy’, directed by Chidambaram and written by Jithu Madhavan, emerged as one of the year's most critically acclaimed films till date. Although it may not match the commercial heights of some of the year's biggest blockbusters, the film has been widely praised by critics and audiences alike, making it one of the most discussed Malayalam films of 2026 so far.

Industry stakeholders say the turnaround has been encouraging after the bleak start to the year. Kerala Film Chamber president Anil Thomas said the market has regained its momentum, even if the performance of individual films continues to vary widely. "The first two months were quite dry, but we can safely say Malayalam cinema is making noise at the box office again. Some films have performed exceptionally well, while others have failed badly. Overall, it has been a mixed year, but the market is active again," he said.

Exhibitors echo the same sentiment. Suresh Shenoy, who owns the popular Shenoys theatre on M G Road in Kochi, said Malayalam films such as ‘Aadu 3’, ‘Vaazha 2’, ‘Mohiniyattom 2’ and ‘Drishyam 3’ played a crucial role in bringing audiences back to cinemas. "Not only that, this year, the Hindi film ‘Dhurandhar 2’ also generated tremendous excitement when it released on the same day as ‘Aadu 3’. The combination of strong Malayalam and Hindi releases, especially during the holiday period, resulted in excellent footfalls," he said, adding that Hollywood releases such as ‘Obsession’ and ‘Michael’ further helped sustain theatre occupancy during the period.

After beginning the year under the shadow of mounting losses and a prolonged dry spell, Malayalam cinema appears to have regained its footing. While the industry's fortunes remain dependent on a handful of big winners amid several underperformers, the sustained flow of successful releases since March has restored confidence among producers, exhibitors and audiences alike, offering hope for a stronger second half of 2026.