The merger of PVR and INOX saw two of the biggest theatre chains come together to offer the Indian audience the ultimate cinema-viewing experience. Having just opened their new five-screen multiplex in Gurugam, PVR INOX has strengthened its foothold in Haryana with 88 screens. Speaking exclusively to The Daily Guardian, Sanjeev Kumar Bijli, Executive Director, PVR INOX Ltd, talked about the new property, how theatres were revived in 2023, the biggest films in the next few months and what the company hopes to achieve in 2024. Here are excerpts from the interview.
TDG: What is the USP of the new property at Gurugram?
Our new 5-screen multiplex at Sector 80, NH-8, Gurugram, Haryana is the 13th property in Gurugram and our first one in the city after the merger. Among our presence in the state of Haryana in cities such as Faridabad, Kalka, Karnal, Yamunagar and Panipat, we have our major share of screens in Gurugram.
This is our second property with the developers, Elan Group and is located in Elan Mercado, a modern fusion of contemporary high street retail, luxury service apartments and the Multiplex. Though a neighbourhood cinema for the residents of Gurugram, the cinema will attract movie lovers from everywhere due to its strategic location on the Delhi-Jaipur highway that has easy accessibility to Delhi, Jaipur and main Gurugram.
It has the best-in-class cinema technologies, including 2K projectors for razor-sharp visuals, great sound experience with Dolby 7.1 immersive audio and vibrant Next-Gen 3D screens for visibly deeper 3D content. The multiplex has a seating capacity of 749 guests with last row recliners in all auditoriums providing utmost comfort.
TDG: 2023 seems to be the year that theatres have recovered post Covid. How has the business been this year and what’s projected for 2024 for PVR INOX?
In Q-1 of FY’24, despite volatility at the box office, we witnessed steady growth in ATP & SPH. The market share for Hindi and Hollywood was significantly higher than last year and Hollywood box office surged with impressive Q-o-Q rebound especially due to strong performances of Barbie, Oppenheimer and Mission Impossible 7. Regional box office demonstrated resilient performance and performed well across languages while volatility in performance of Hindi films reduced.
Q2 FY’24 was the best every quarter of all time for the company in terms of Admissions, ATP and SPH leading to highest ever Revenue, EBITDA and PAT. The biggest highlight of the quarter was the record-breaking performance of the Hindi box office. Jawan and Gadar 2 ranked amongst the highest-grossing Hindi films of all-time, amassing over Rs 750+ crores and Rs 620+ crores at the box office. They were complemented by solid performances of mid-budget movies, with Rocky aur Rani Ki Prem Kahani and Oh my God 2 grossing Rs 150+ crs and Dream Girl 2 crossing the Rs 100 crore mark. Fukrey 3 released near quarter end, also crossed Rs 100 crore at the box office. In Hollywood, Oppenheimer and Mission Impossible: Dead Reckoning Part 1 set a fantastic tone, grossing Rs 150+ crores and Rs 130+ crores in India. Barbie and Nun II also performed well, crossing the Rs 50+ crore mark. On the regional front, Jailer (Tamil), featuring Rajinikanth, stood out with an impressive box office collection of over Rs 390 crores. Other regional successes such as Baipan Bhari Deva (Marathi) and Carry on Jatta 3 (Punjabi) secured substantial earnings, reaching Rs 90+ crores and Rs 44+ crores, respectively.
TDG: How has Indian regional cinema content (non-Hindi) strengthened the portfolio and PVR INOX business?
We have witnessed a significant change in mix between Hindi and Regional content from pre-pandemic to FY’23, our Box Office share of Regional Content grew from 23% to 33%. Regional box office has shown relative stability with low volatility with blockbuster performances from Carry on Jatta 3 (Punjabi), Baipan Bhari Deva (Marathi), Jailer (Tamil, Telugu, Malayalam, Kannada), Kushi and Bro (Telugu). Robust regional content lineup continues to drive strong box office performance.
TDG: What are the big releases – Hindi, English, regional – in Nov-Dec that’ll end the year on a bang for PVR INOX?
In the upcoming months, we are highly optimistic about the content lineup across various languages. This includes eagerly awaited Hindi releases like Tiger 3, Animal, Sam Bahadur, Yodha and Dunki. Hollywood enthusiasts can look forward to The Marvels, Taylor Swift’s The Eras Tour Movie, Napoleon, Wonka and Aquaman and the Lost Kingdom. Additionally, regional cinema offers compelling releases such as Captain Miller, Salaar, Operation Valentine, Hi Nanna, and more. We are excited to bring a diverse and captivating cinematic experience to our audience in the months ahead.
TDG: What are some of the challenges you still continue to face? Will they be overcome in 2024?
Following our recent merger, we have been diligently working to realize the full potential of this strategic union. Our integration process has been progressing seamlessly, yielding substantial operational efficiencies. Box office revenue synergies have taken place with optimized programming strategy through efficient scheduling, occupancy linked dynamic pricing and improved customer engagement with personalized offers and promotions. F&B revenue synergies have yielded through weekday/weekend offer, introduction of non-veg food at INOX while overhead cost synergies have resulted through renegotiation of Contracts, efficient manpower planning, standardizing SOPs across PVR INOX and moving to common vendors.
PVR INOX continues its strong growth momentum, with 37 new screens openings in 7 cinemas during Q-2 and a total of 68 new screens in 12 cinemas in H1 FY’24. We are firmly on track to open a total of 150-160 new screens in FY’24, and will fund this growth through internal accruals. Thanks to the robust financial performance and substantial free cash flow generation, we have successfully reduced our net debt by INR 3,276 million in H1’FY24. This achievement firmly positions us on the path to achieving a free cash flow positive status by the end of FY’24. We are on course to deliver a significant portion of merger synergies in FY’24.