PVR INOX plans to shut 60-70 underperforming screens in FY25 while adding 120 new ones, focusing on expansion in South India. The company is shifting to a capital-light growth model, partnering with developers through a franchise-owned, company-operated approach. With a goal to become net-debt free, PVR INOX is considering monetizing non-core real estate assets. Despite reducing capital expenditure, it aims to restore pre-pandemic margins by increasing revenue through higher footfalls, innovative customer strategies, and cost efficiencies. In FY24, the company reported INR 6,203.7 crore in revenue, but a loss of INR 114.3 crore, largely due to merger integration costs.
PVR and INOX, the leading multiplex operators, intend to shut down 70 underperforming screens in the fiscal year 2025. They also aim to potentially monetize non-core real estate assets in key areas like Mumbai, Pune, and Vadodara, as stated in their recent annual report. Despite planning to add 120 new screens during FY25, they expect to close around 60-70 screens that are not performing well, marking a strategic growth .
Around 40 percent of the new screen additions will be in South India, where PVR INOX plans to strategically focus on this underpenetrated region as part of its medium to long-term goals. Additionally, the company is shifting its growth strategy towards a capital-light model, aiming to reduce capital expenditure on new screen additions by 25 to 30 percent in the current fiscal year.
PVR INOX is now collaborating with developers to jointly invest in new screen capital expenditure by adopting a franchise-owned and company-operated (FOCO) model. The company is also exploring the monetization of its owned real estate assets as part of its goal to become "net-debt free" in the near future. This includes potentially monetizing non-core real estate assets in prime areas such as Mumbai, Pune, and Vadodara, as shared by Manajy Kumar Bijli and Exor Sanjeev Kumar in their address to shareholders.
Regarding growth, the company emphasized accelerating its expansion in underrepresented markets. Their medium to long-term strategy includes increasing the number of screens in South India. They expect around 40 percent of our total screen additions to come from this region. In the past year, PVR INOX opened 130 new screens across 25 cinemas and closed 24 underperforming ones, aligning with its focus on profitable growth.
PVR INOX is strategically restructuring its operations for fiscal year 2025 by closing 60-70 underperforming screens while planning to add 120 new screens, with a significant focus on South India, which will account for 40% of the new additions. The company is adopting a capital-light model to reduce capital expenditures and exploring partnerships through a franchise-owned and company-operated (FOCO) model. PVR INOX aims to monetize non-core real estate assets to move towards a "net-debt free" status, while successfully achieving 80-90% of its synergies post-merger. Despite facing a loss in FY24, the company witnessed increased ticket prices and food and beverage spending. Overall, PVR INOX is positioning itself for profitable growth by optimizing its portfolio and enhancing customer acquisition strategies.
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