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PVR-Inox To Add 200 Screens Every Year, Says Ajay Bijli

PVR-Inox have opened 143 screens in 21 cities in this fiscal, bringing the total number of screens to 1,658 in 113 cities.

<div class="paragraphs"><p>PVR launches Lucknow's biggest 11-screen cinema post its merger with Inox Leisure. (Source: BQ Prime)</p></div>
PVR launches Lucknow's biggest 11-screen cinema post its merger with Inox Leisure. (Source: BQ Prime)

The merged entity of PVR Ltd. and Inox Leisure Ltd. is expected to add about 200 screens every year, with more focus on the underpenetrated tier 2 markets.

"India is a very large country, and we want to reach every consumer who wants to go out and watch movies at every price point," Ajay Bijli, managing director of PVR-Inox, told BQ Prime. "The plan is to roll out 200 screens every year. This year, we will be expanding in about 30 to 40 more cities with a capex of Rs 700-750 crore."

The two companies together have opened 143 screens in 21 cities in this fiscal, bringing the total number of screens to 1,658 in 113 cities.

Its latest launch is an 11-screen "superplex" at Lulu Mall in Lucknow, with an investment of about Rs 60 crore. It houses all formats: a multi-sensory 4DX format, a premium large-screen format, and two auditoriums of PVR’s luxury format, LUXE, along with seven auditoriums with last-row recliners.

The theatre is designed in a contemporary style, resonating luxury, glamour, and exuberance, it said. "With these kinds of experiences, we want even those people, that have home theatres at home, out," said Bijli. Such premium formats comprise 10-15% of its portfolio, he said.

Meanwhile, the company has identified Ajmer and Varanasi, as well as Tirupur and Tirupati down south, as a few cities with massive potential. "These are smaller cities, so for us the input costs like real estate expenses and operating costs are much lower, and therefore the ticket prices are low."

PVR's average ticket price is Rs 240. The prices start as low as Rs 112 and go up to about Rs 1,000 for luxury formats. The spend per head for the company stood at Rs 113 in the quarter ended December. On being asked if the current inflationary environment is affecting the spend per head, Bijli said, "The cinema business has always been seen as recession-proof."

"People are sacrificing on discretionary goods, travel, etc., but cinema is relatively a low-ticket item. Our ticket prices, by the way, are below inflation. If you compare 2019 to 2023, the increase in ticket prices is not even 5%, whereas the inflation rate has been 7% in the last two years. Consumers are rather more sensitive to the pipeline of content," according to Bijli.

Bijli expects the collections for Bollywood, which have underperformed in the last several quarters, to cross pre-Covid levels this quarter, aided by just one movie. "This quarter started with 'Pathaan', which has already broken all sorts of records. We still have two more big Bollywood movie line-ups, so we are looking forward to a strong year ahead."

The future of the film exhibition industry looks "bright" from now on, said Bijli. The ongoing increase in the supply of retail real estate is expected to fuel growth, even as consumers are now more willing to spend. In addition, the large number of films that are being made will also drive revenues.

In FY24, the merged entity of PVR and Inox expects to report double-digit growth in its top line. The combined consolidated income of PVR and Inox stood at Rs 4,777.8 crore in FY19, which was a normal year of operations before the Covid-19 pandemic forced cinemas to remain shut.

In terms of economies of scale, the management of the country's largest exhibitor is looking to generate annual revenue and cost synergies of Rs 225 crore over the next 12 to 24 months, which will lead to margin expansion. They expect to derive the benefit of synergies from food and beverage and advertising revenues, among others, for the merged entity.

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