About 68-70 km from Vijayawada is Machilipatnam also known as Masulipatnam and Bandar, in the Krishna district of Andhra Pradesh. This quaint place is now part of the PVR Inox portfolio; on May 31 Machilipatnam got its first three-screen multiplex.

While it is no secret that the Telugu speaking states – Andhra Pradesh and Telangana – boast of cinema lovers and the Telugu film industry is huge, the fact is PVR tickets are not cheap.

Sanjeev Kumar Bijli, Executive Director PVR INOX Ltd

Sanjeev Kumar Bijli, Executive Director PVR INOX Ltd

When asked why Machilipatnam, Sanjeev Kumar Bijli, Executive Director PVR INOX Ltd in a virtual interaction told businessLine, this is in sync with the entity’s vision to expand into tier three cities. “We’ve been saying that our strategy is to grow in tier 2, tier 3 cities as well now. And when I say that, I don’t mean all over India, but South India.”

South contributes 35 per cent to the PVR INOX box office, he said, adding “FY23 had a higher contribution but in FY24 North was higher as there were big Hindi movies.”

“Southern States – Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, and Kerala – are really where ‘the movie’ is big. Index is very high still, despite the challenges that you have mentioned which is OTT or elections or IPL, you know there is basically still very high movie going population in these 4-5 states,” he said.

“A lot more than North, West and East India, and this has been the case for us, not just in the last two years, which is the full two years of operations post pandemic. Even before the pandemic, despite challenges, South India has really performed well,” he added.

High movie going index

“We’ve taken a conscious decision, it’s not that we’re not growing in other places, but we want to focus our growth in South India because the movie going index is still very high. The intent is to focus on growth organically,” Bijli elaborated.

He said PVR INOX is looking at improving return on capital employed (ROCE) for sure. “As you know, that has been affected in the last two years because the total returns have gone lower because of the occupancy levels falling in the rest of the country, which is West and North and East, not so much in the South. So that has obviously depressed the overall ROCE,” he said.

“To improve the overall ROCE we have to look at two things. One is improve the return, which we can only improve by getting more admissions and focusing on getting more people into the cinemas and secondly to reduce our capital intensity. So we’re reducing our capital intensity by doing two things, one again focusing on key markets. And focusing on markets where there is a very clear return like South India where people are still coming,” Bijli explained.

When asked how does the company sustain the cash flow, he said: “We had about Rs 800 crore EBITDA last year which by no means is a small number. So this year also we should do better than that. You know the line-up of films is looking very strong -- for the rest of the year from June onwards.”

“So cash flow basically, is a function of the revenues and the revenues are a function of the admissions that we get; If we get good admissions this year, which we are,” he said.

‘Always experiment’

“We always experiment with different content. The idea is to fill up the cinemas and if we are very fortunate to get a bouquet of content, you know to choose from, then that is what we look at. We actually look at types of content, dubbed films or subtitled films as you said. Also as you said, because our business is to actually ‘show’,” he said.

“To get people to the cinemas there are other various promotions that we are doing, whether it’s selling gift cards, whether it’s F&B promotions, whether it’s on F&B we’re doing bottomless,” Bijli said.