PVR INOX, one of India’s biggest multiplex chains, just dropped big news about their plans for the
upcoming years. It plans to close 70 non-performing screens in FY25. One of the major reasons for
this decision is the potential monetization of non-core real estate assets in prime locations such as
Mumbai, Pune and Vadodara. This shutdown is offset by an ambitious growth strategy, aiming to
unveil 120 additional screens within the same timeframe. Significantly, 40% of the new screens will
specifically be located in South India, an area that the company has pinpointed as having a strong
desire for movies but limited multiplex coverage.
The concentration on South India is a key aspect of PVR INOX’s growth strategy for the medium to
long term. The company believes there is a great opportunity in this market due to the area’s
enthusiastic movie-watching community and the chance to build a more prominent presence in a
neglected region.
By using this strategy, PVR INOX is moving towards a growth model that is capital-light in a unique
expansion strategy. This updated approach consists of collaborating with developers to co-invest in
new screens and implementing a franchise-owned and company-operated (FOCO) model. This change is
anticipated to decrease spending on new screen installations by 25 to 30 percent in the current
financial year, enabling a more effective allocation of resources.
Financial factors are a major influence behind these changes. During the previous financial year, PVR
INOX generated ₹6,203.7 crore in revenue but suffered a loss of ₹114.3 crore. The company’s total
debt is at ₹1,294 crore but has decreased by ₹136.4 crore over the last year. PVR INOX is considering
selling off its real estate assets in prominent areas like Mumbai, Pune, and Vadodara to enhance its
financial standing and aim to become debt-free.
In spite of these obstacles, there are positive signs. In the previous fiscal year, the company
experienced a 10% rise in ticket prices and an 11% boost in food and beverage spending per
customer. In the future, PVR INOX anticipates that these growth rates will be more in line with
historical trends over the long term.
The company is also prioritizing enhancing operational effectiveness. This consists of reworking
rental agreements to lower fixed expenses, establishing a more streamlined organizational layout,
and implementing different methods to control overhead costs. Moreover, PVR INOX plans to
enhance earnings by driving more visitors through creative methods to attract and keep customers.
PVR INOX’s proactive strategy to address current challenges and prepare for future growth reflects
the ongoing recovery of the entertainment industry from the pandemic’s effects. PVR INOX is
preparing for a new era in India’s multiplex industry by improving its screen range, experimenting
with new growth strategies, and prioritizing financial stability.
