Sanjeev Kumar Bijli, Executive Director, PVR INOX Ltd, sees major recovery for the cinema chain in the post-pandemic environment. With the PVR-INOX merger nearing completion, in a sit down interview with businessline, Bijli said that the multiplex chain has set its eyes on South India, where organised cinema and retail have limited presence. Edited excerpts:
Insignia screens are PVR-Inox’s luxury cinema offering, where customers can have an opulent viewing experience at a premium price. As a consumer of Insignia myself, I often find these auditoriums empty. Are you encountering an issue with occupancy?
It is content driven. For instance, Killers of the Flower Moon did not do well worldwide. Something like this drives down occupancy for these screens. But let us see how a film like Animal will do. If a film is good, then there is a market for people to come and pay a premium on it.
In many cities we are getting a lot of feedback for a premium facility — both luxury and non-luxury. And these are always packed because every city has a clientele that is willing to pay ₹1,000 - ₹1,200 for the premium experience.
There will be an occupancy issue if the content is not good, because people will not come no matter what you charge them.
How much revenue is coming from your luxe offering?
It is a very small percentage. And we don’t overload the number of screens. So today we have around 1,720 screens. I think I can count the number of Luxe screens on my fingers; it is not more than 25 screens. Mainstream screens are what makes up the majority for us. So the revenue from our luxe offerings are small, but as every city prospers, there will be a clientele which will want something more aspirational.
You have targeted to add 130-140 screens by the end of fiscal 2024. what is the outlook for FY25?
We have planned for around 150 to 200, but realistically we will add 150 screens in the next fiscal year. We have some exciting new projects and there will be a focus on South India, in particular. There will be more projects coming up in Mumbai and Delhi; there are still places in these tier 1 metros that are completely underserviced.
So you are expanding in the South, which is a market that has a significantly higher presence of single screens compared to the North. Why do you think this is the right time to pursue the southern expansion?
South is one place where single screens co-exist with multiplexes. You don’t see many single screens in Mumbai anymore. We are seeing a lot of opportunities in the South. There are a lot of malls coming up in the South driven by developers like Prestige Group, LuLu Group, Brigade Group, etc. They are putting in a lot of money to build up the retail infrastructure in the South. It is like nothing we have seen in Delhi and Mumbai.
Wouldn’t that mean the death of single screen theaters, in the South? And will you be reducing ticket prices in these markets to match single screen prices?
Unfortunately, yes. Slowly, over time, single screen theaters are going to die out. Regarding ticket pricing, markets in the South are already regulating the ticket prices. Since Tamil Nadu and Andhra has a regulated ticket price, we will not be charging more than that.
We are also looking to expand in tier-2 cities in the South. We are looking to build cinemas in places such as Vellore, Armoor, Machilipatnam, etc. These are very exciting markets for us since they do not have any multiplexes.
You had roped in BCG to discover synergies with the merger, how is that going on? Is the merger complete?
We are on track and we had been given the guidance that the process would be completed in 12-18 months. We are in the seventh month right now, and we are tracking the numbers. By the end of 18 months, we will be able to complete it.
Regarding our integration with INOX, it is still ongoing. There is so much on the backend that is different. It will take up to March to complete all operations. We haven’t done layoffs as of now, but we are still looking at, but the good thing is that we are still expanding, we are also adding screens, so there will be an opportunity to absorb a lot of people in the growth of the firm.
Q2 for FY24 was a historic quarter for PVR-Inox, but Q3 has been more muted. How do you expect the next fiscal year to fare?
This year, the number of admissions and box office numbers will be higher than the pre-pandemic levels, but it is too early to tell how the next fiscal is going to pan out. It will depend on the movie pipeline. It is going back to pre-pandemic levels in many ways, so not only are the mass blockbusters drawing people back to the theaters but sleeper hits — such as Dream Girl 2, Zara Hatke Zara Bachke, Fukrey 3 etc — have also started doing well since June.