With PVR and Inoxmerger getting completed earlier this month, the multiplex chains are expecting to derive annual synergies of ₹225 crore over the next 12-24 months in terms of margin expansion. The merged entity is looking to add 200 screens every year to strengthen its presence in under-penetrated territories, including South India.
On Wednesday, PVR launched its 11-screen superplex in Lucknow. The merged entity now operates 1658 screens across 356 properties in 113 cities (India and Sri Lanka). The merger of PVR and Inox Leisure became effective from February 6.
Ajay Bijli, MD, PVR-Inox (merged entity) told businessline that synergies will lead to significant margin expansion.“ We expect to derive annual synergies of ₹225 crore over the next 12-24 months in terms of EBITDA impact ,” he added.
Also read: PVR swings to profit in Q3
The company is initially focusing on HR, technology, and operational integrations. “Luckily, both companies have similar mindsets and philosophies so the cultural fit is not very complicated. Of course, in terms of economies of scale, we are looking at deriving a lot of synergies in the coming days regarding revenue and costs. We are also looking to derive capex synergies and expect the cost per screen to come down by 10-15 per cent,” he added.
Bijli pointed out that there is a huge headroom for growth in terms of F&B and ad revenues for the merged entity.
“We are looking to add 200 screens per year. We are looking to accelerate growth in the under-penetrated South Indian market. We will also focus on growing our presence in newer catchment areas and deepening our presence in existing cities. Expansion in tier-2 and tier-3 cities will also be a key focus,” he added.
So far in this fiscal, the merged entity has opened 143 screens across 26 properties in 21 cities.
Talking about the post-Covid recovery of the cinema industry, Bijli said, “We are bullish on future growth strategy. Hollywood has now announced more movies for release. We have a strong line-up of Hindi movies, including big-budget content. Regional cinema makers are now looking to draw pan-India audiences.”