PVR Inox capex on track, focus on south India markets

New Delhi: Multiplex chain PVR Inox is on track to open 170 new screens in the financial year 2024 with an investment of ₹600-700 crore, the company said on Wednesday.

With 97 screens already launched and 70-75 more expected this quarter, the expansion includes 20% premium formats such as ICE and 4DX. A significant focus is on south India, accounting for 40-45% of new openings, identified as a key growth area.

PVR Inox on Wednesday reported a 20% year-on-year decline in its consolidated net profit to ₹12.8 crore for the third quarter of FY24. The company's revenue jumped 64% to ₹1,546 crore.

The company recorded 36.5 million admissions with an average ticket price or ATP of ₹271, up 14% year-on-year. Its spend per head (SPH) rose 8% to ₹132.

For the nine months ended 31 December, profit and revenue touched ₹204.5 crore and ₹4913.3 crore, respectively.

Despite some underperformers, December emerged as the highest grossing month of 2023, thanks to Hindi action film Animal, which grossed over ₹650 crore, the cinema chain said. Other notable releases during the month included Salaar grossing ₹480 crore, Dunki at ₹270 crore and Sam Bahadur at ₹110 crore till date.

“The World Cup played on the minds of the film fraternity that reduced the number of releases during this quarter. However, when movies did release, some of them did far better than expectations,” Ajay Bijli, managing director, PVR Inox Ltd., said in an interview post earnings. 

Bijli referred to the unexpected success of small-scale films such as 12th Fail and Sam Bahadur while adding that Shah Rukh Khan-starrer Dunki may not have crossed the numbers of Jawan and Pathaan, his other 2023 hits but found a draw nevertheless.

He said the quarter missed a regular pipeline of Hollywood releases because of the writers' and actors’ strike in the US, while southern language films have also not managed to break out. 

Bijli added that the 14% increase in average ticket price does not pinch consumers who are conscious of how they spend their time. Besides, average ticket price appears higher because of the inclusion of rates at premium luxury cinema formats.

Looking ahead, despite the likely absence of big stars such as Shah Rukh Khan and Salman Khan from the screen this year, Bijli said the business, which is driven by volume, should balance itself out, thanks to upcoming films by Ajay Devgn (Shaitaan, Maidaan, Singham Again) and Akshay Kumar (Bade Miyan Chote Miyan) .

Nitin Sood, chief financial officer at PVR Inox Ltd, said the company had earmarked an expenditure of ₹600-700 crore for screen expansion in FY24 and will have a similar plan in place for next year. 

“We’re looking at adding eight to nine new cities to our portfolio every quarter but waiting for mall and retail expansion in several markets,” Sood added.