Adlabs to remain in consolidation mode in FY10

Priyanka Akhouri
Posted: Monday, Jul 06, 2009 at 0001 hrs IST
Updated: Monday, Jul 06, 2009 at 0001 hrs IST

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Mumbai: For Adlabs, a Reliance Anil Dhirubhai Ambani Group (ADAG), the year 2009-10 will be one of consolidation, after acquisitions and an expansion of business in the previous financial year.

Venkat Devarajan, CFO, Adlabs Films Ltd said, “Our growth strategy for the FY 2008-09 was entirely acquisition and expansion of business in Malaysia, the US and India. Our revenues have doubled since last year and our area of growth is adding 282 screens this year as compared to 147 screens earlier. However, this will be a year of consolidation and we are planning to stabilise our various operations.” During the last 12-15 months, Adlabs invested Rs 300 crore on acquisitions, but now needs to focus on carrying out these operations efficiently, he added. The company is planning to invest around Rs 200 crore by the end of 2009 in its operations.

As part of its expansion plans, Adlabs is also investing around Rs 90 crore in implementing a 200,000 square feet studio facility, with 8 sound stages at Film City Studio in Mumbai. “There is a dearth of film studios in India and particularly Mumbai. With this studio, we will be able to add new business models where we will be renting the studio for television and film production. We are investing around Rs 60-70 crore in the equipments of the studio,” added Devarajan. The first phase of the studio will be operational from December, 2009.

In India, the company has a market share of 10%-15% of the box office collections and accounts for 25%-35% of Hindi box office collections and over 60% of Tamil and Telugu collections across US. Adlabs has added 54 screens to reach 201 screens in India, 165 screens in US and 63 screens in Malaysia.

In May this year, Adlabs mentioned about its plans to establish a BPO business for the media space and is said to be investing Rs 100 crore. The company has already got a special economic zones (SEZ) unit in Airoli in Navi Mumbai, which will be effective by the end of 2009. Adlabs reported a net loss of Rs 51.37 crore for the year ending March 2009.

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