Home / Market / Mark-to-market /  INOX puts up a good show in the December quarter

A good content pipeline and a boost from the acquisition of Satyam Cineplexes Ltd (SCL) are some of the factors that helped INOX Leisure Ltd put up a good show in the December quarter.

SCL became a wholly owned subsidiary of INOX on 8 August last year.

For the December quarter, the multiplex operator’s consolidated revenue increased by 13% over the September quarter to 300.76 crore, which is commendable. Comparable numbers for the year-ago quarter are not available as SCL was not a subsidiary then.

“The line-up of blockbuster content has led to an increase in footfalls, average ticket prices, and an overall increase in sales and profitability figures," said Deepak Asher, director, INOX Leisure in its earnings release.

The company’s average ticket price for the December quarter increased to 175 from 162 in the September quarter.

That was primarily on account of the addition of premium locations with the SCL acquisition, three blockbusters during the quarter and higher occupancy of premium seats.

Also, the rising contribution of 3D movies helped, as 3D tickets are priced at a 15-20% premium over 2D tickets.

Footfalls increased to 11.6 million in the December quarter from 11.2 million in the September quarter and 8.8 million in the December 2013 quarter.

Operating performance was strong, too. INOX’s operating profit margin increased by 164 basis points (bps) sequentially to 15.4% last quarter. One basis point is one hundredth of a percentage point.

That was on account of the comparatively slower pace of growth in total expenses, which was helped by a slower rate of increase in the cost of food and beverages, rent and other expenses.

Further, strong other income growth and a slower rate of increase in depreciation costs and finance expenses meant that INOX’s net profit for the December quarter increased to 14.3 crore against 5.23 crore in the September quarter.

Not surprisingly, investors cheered INOX’s latest numbers. Its share rose 3.3% in reaction to the results on Friday, when the broader markets were marginally positive. It has 365 existing screens and its project pipeline includes 12 screens in the March 2015 quarter and another 169 screens under construction post FY15.

Content pipeline remains a key factor for the stock as more people will be drawn to visit cinemas if the content can pull in the crowds.

The writer doesn’t own shares in the above-mentioned company.

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