Prabhas-starrer Kalki 2898 AD, which released on Thursday, has crossed the Rs 300-crore mark in box office collections in its first weekend in India. While it is good news for the country’s largest multiplex operator, PVR Inox — which has struggled with a weak first-half this calendar year, the company is no longer counting on feature films alone to drive revenue at its properties.
The entertainment company, which has grappled with net losses for the last four years and has a net debt of Rs 1,300 crore as of March 31, 2024, is looking to enhance revenue through content diversification and is also putting in place an asset-light model to reduce capital expenditure (capex) by 50-60% over the next two years, Sanjeev Kumar Bijli, executive director at PVR Inox, told FE.
The idea, Bijli said, is to optimise resources and maximise returns by looking at alternative revenue streams and prioritising operational efficiencies.
PVR Inox has an annual capex of around Rs 300-350 crore, according to sector analysts. It is looking to set up 118-120 screens in FY25, cashing in on the south Indian market, Bijli said.
Shares of PVR Inox were up 6% intraday on the BSE on Monday, before finally settling at Rs 1,497.95 apiece, up 4.93%.
Bijli said that the company is also renegotiating rentals for operational cinemas, shutting down underperforming theatres and tapping food and beverage (F&B) revenue aggressively.
In FY24, PVR Inox’s F&B revenue increased by 21% year-on-year to nearly Rs 2,000 crore. It accounts for around 32% of its FY24 revenue of Rs 6,107 crore, according to sector experts. The F&B spend per head increased by 11% y-o-y to Rs 132 in FY24 as the company provided multiple food options at its properties. The company has also formed a strategic partnership with Devyani International, which runs quick-service restaurants, to jointly develop food courts in shopping malls within India.
“The idea is to improve admissions by screening alternate content such as live events, concerts, popular sporting leagues and tournaments besides feature films,” Bijli said about the company’s content diversification strategy.
“As far as an asset-light model goes, we are talking to like-minded developers who can make an upfront capital investment, while we will come in with our projectors and sound. Alternatively, we are also looking at a 100% investment from developers, while we will manage properties for a fee,” he said.
Following the closure of 85 underperforming screens in FY24, the multiplex chain plans to shutter 70 more properties in FY25, Bijli said. Currently, the cinema chain operates 1,748 screens in 361 cinemas in 112 cities in India and Sri Lanka.