The festival-laden third quarter is going to be highly profitable for PVR Cinemas, says Nitin Sood, CFO of the company.On the ticket prices, Sood says the company annually hikes the price by 4-6 percent due to inflation. He believes its food and beverage business provides the biggest earning opportunity. On its acquisition of Zea Maize Pvt Ltd, he says the company is going to profit as popcorns have longer shell life and they do not require to be served warm. With Hollywood’s two big movies-- Spectre and Star Wars-- releasing with those of Salman Khan, Shahruk Khan and Ranbir Kapoor’s, the year looks promising, he tells CNBC-TV18.
Below is the transcript of Nitin Sood's interview with Latha Venkatesh & Sonia Shenoy.
Sonia: CLSA put out a note where they initiated coverage on your stock and they have given a three year target price of Rs 1,440 and they expect the stock to be a double bagger. One of the reasons of course is the fact that ticket prices have also been moving higher in the recent past and it's not a good thing for consumers like us but are you planning to raise ticket prices anytime soon?
A: If you look at our average trajectory of ticket pricing growth, it's always been in the region of 4-6 percent on an annual basis, which is pretty much in line with inflation. So ticket prices moves according to inflation and it is not that we have 15-20 percent increase in a year. However, this trend will continue, ticket prices will continue to grow with inflation.
Our food and beverages (F&B) growth has been quite stupendous. If you look at where we were three years ago to now, our contribution of F&B revenues to the overall pie has significantly moved up and we think that will be big area where there is a big opportunity in India to grow and that will continue to do wonders for us.
Latha: You did an exceptional Q1, revenues Rs 486 crore and profit going through the roof, Rs 58 crore. How would the rest of the year look?
A: Overall the year is looking very promising. We have some great content this year. One of the big levers for us this year has been the Hollywood and the regional contribution and in that Guajarati, Punjabi, Marathi and south Indian language films have done exceedingly well. This has been the first year where the contribution of Hollywood and regional content to overall box office for us is as high as 45-50 percent which is a big thing and overall Hindi content is looking good, Q3 is going to be fabulous, so we are looking at a great quarter ahead.
For entire interview, watch accompanying video.
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