Our focus is on ensuring profitability across verticals

Written by Anand J | Updated: Apr 11 2014, 22:08pm hrs
The Anil Ambani promoted Reliance MediaWorks, which runs film and television studios and multiplexes which is now planning to delist from the stock exchanges is currently looking at paring its debt. Venkatesh Roddam, CEO, Reliance MediaWorks, joined the company in January 2012 and had worked with the preceding CEO Anil Arjun for eight months. In an interview with FEs Anand J, he says that the company is looking for private equity infusion to reduce its debt burden.

What will be your focus area for the next 12 months

We have made investments for the next three to five years across verticals in terms of technology, infrastructure, creating a network of cinemas till 2010. We have been consolidating from 2011, regrouping the various businesses and launch a growth phase which we are witnessing now. We are today ensuring that we are a profitable business across various verticals.

Have you not lost market share and mind share to PVR and Inox in the industry

I would not disagree with that at all. But the market share is only an acquisition away. If I look at our presence in smaller towns, we are still the dominant player. Irrespective of others growth, we have largely retained our market share at 10%. And if you look at comparable properties across comparable towns, we have shown a better growth. They have streamlined screens under one brand. Innumerable local chains have collection of properties with who we are in talks with. That will fall somewhere in between an organic and inorganic growth path. There are multiple players who have screens in range of 25-50. I am not in the race of number of screens. We are looking whether these screens can complement our retail efforts.

PVR and Inox have been making profits, which you have not done for the past few years now.

The kind of investment that RMW has done is unparallelled in the market place. The sourcing could be parent company funding and external debt. Creating a global infrastructure following a debt route is unheard of in the industry. But the value we created makes the debt look insignificant. We have created a perfect platform for external equity for growth capital and debt reduction. We dont see ourselves as a loss-making company.

Which were the areas where your investment went wrong

For instance, the equipment rental business cameras, lights, lens, etc used to be a core business a few years back has now become a peripheral business. From standalone studio services these have become packet services. We had to do rethink our strategy. But because of that, we still remain a one-stop destination for anything related to film making.

When do you aim to achieve profitability

It depends on how we progress over the next three to four quarters. If we go down an equity capital infusion route, the profitability can be instant. If we were to become profitable organically, it could be time consuming. It could be somewhere in between. What makes us look bad in balance sheet is the debt scenario. We have covered the debt position well through our enterprise value. Every single business of ours is profitable at an operational level today.

Can you talk about the expansion plans in south India

Our presence in south was limited to Hyderabad, Pondicherry and Coimbatore. We are now actively pursuing Bangalore, Chennai, Vijayawada and Vishakhapatnam, apart from expanding our presence in Coimbatore and Hyderabad. We want to add 30-60 screens this fiscal as per the talks we are having with property owners and might go up as we have more talks through the year.

Do you think your strategy of acquiring single screens in small towns backfired Would you follow such strategy again

The problem with single screens was a significant upside or significant downside. We consolidated and exited quite a few such screens. Whatever we have now are key drivers for us. We are still exploring developing properties of our own apart from looking at malls as long as it makes economic sense.