PVR-Inox focus on penetrating further in South India markets

PVR-Inox which declared its results for the first time as a merged entity on Monday post market hours, reported 34 percent higher revenues owing to a low base effect, wherein Q4-FY22 was affected by the Omicron variant of Covid. The combined entity’s occupancy declined 290 bps year on year to 22.2 percent versus 25.1 percent in Q4-FY22. Admits for the combined entity improved 21 percent year on year to 30.5 million, while the average ticket price and spends per head improved 3 percent and 12 percent year on year respectively. Consequently, the company reported a loss of Rs 333 crore.

In an interaction with CNBC-TV18 on Tuesday, Ajay Bijli and Nitin Sood said the occupancy rates are being affected due to volatility in content consumption trends. The multiplex behemoth is expected to add 180 new screens in FY24. The operator also said 168 screens were added in FY23 between PVR (97 screens) and INOX (71 screens), while 79 screens were added in Q4-FY23 between PVR (53 screens) and INOX (26 screens).

The multiplex chain plans to shut down 50 screens in FY24 with either their leases expiring or have weak performance. “The company plans to shut down approximately 50 cinema screens over the next 6 months. These properties are loss making, or housed in malls which have reached the end of their life cycle with little hope of any revival. The company has taken an accelerated charge of the depreciation in its books and written off the WDV of assets," PVR INOX said in a statement.

The company targets Rs 6,000 to Rs 7,000 crore in FY24 with margins ranging 18 to 20 percent. It also expects to reach pre pandemic levels of occupancy in FY24.

Bijli and Sood further stated that there is an potential to grow advertising revenues from Inox properties and the merged entity targets Rs 500 crore in advertising revenues in FY24.

The stock is trading 3.6 percent lower on the exchanges at 11 am on Tuesday.