Multiplex operator PVR INOX is set to shut down 70 underperforming screens in FY25. The company also plans to explore the potential monetisation of non-core real estate assets located in prime areas, including Mumbai, Pune, and Vadodara, as per its latest annual report.
In an attempt to chase profitable growth, the firm is also adding 120 new screens in FY25 while shutting 60-70 ones.
Approximately 40 percent of new screen additions will be in South India, which will be a key focus area due to its relatively lower market penetration, according to PVR INOX’s medium to long-term strategy. Additionally, the company is shifting towards a capital-light growth model, aiming to cut its capital expenditure on new screens by 25 to 30 percent in the current fiscal year.
Joint investment in new screen capex
The firm will now partner with developers for joint investment in new screen capex with a shift towards a franchise-owned and company-operated (FOCO) model.
The company is also considering monetising its owned real estate assets as part of its goal to become “net-debt free” in the near future.
“This involves a potential monetisation of our non-core real estate assets in prime locations such as Mumbai, Pune, and Vadodara,” Managing Director Ajay Kumar Bijli and Executive Director Sanjeev Kumar said.
Throughout the year, PVR INOX launched 130 new screens at 25 cinemas and closed 85 underperforming screens across 24 cinemas, aligning with its strategy for profitable growth.
“This rationalisation is part of our ongoing efforts to optimise our portfolio. The number of closures seems high because we are doing it for the first time as a combined entity,” said Bijli.
PVR INOX’s net debt stood at Rs 1,294 crore for FY24. According to CFO Gaurav Sharma, the company reduced its net debt by Rs 136.4 crore in the previous fiscal year.
(With PTI inputs)