PVR restarts capex cycle, plans to open 125 screens in FY23

PVR has already ramped up operations in a significant way as it saw audiences come back to theatres after the third wave of COVID-19. "The company is restarting its capex cycle from FY 2022-23 and has plans of opening (around) 125 screens this year, breaking its own record of opening 87 screens in a year in FY 2019-20. The company had opened 29 screens across 5 properties in FY 2021-22," the report said.

In their message to shareholders, PVR Chairman and Managing Director Ajay Bijli and Joint Managing Director Sanjeev Kumar said, "We were confident that the theatrical exhibition industry having withstood innumerable challenges in the past would bounce back dynamically in FY23."

Terming the last pandemic-impacted two years as "the most trying period for our business", Bijli said now audiences are clamouring to come back to theatres. Domestic releases like RRR in March 2022 and KGF 2 in April 2022 have grossed over Rs 1,100 crore and Rs 1,200 crore, respectively, in the Global box office collections.

"And with the excellent content line-up that we have for the rest of this year, we hope that this momentum would continue," they said. Sharing an update about PVR’s scheme of all stock amalgamation of rival INOX, they said it is currently in the process of seeking these approvals and hope to complete this merger in the current fiscal year.

As per the agreement, INOX will merge with PVR in a share-swap ratio of 3 shares of PVR for every 10 shares of INOX. The combined entity will be named PVR INOX Ltd with the branding of existing screens to continue as PVR and INOX, respectively.

New cinemas opened post the merger will be branded as PVR INOX, both the companies had said on March 27.

The merger will "bring together two of India’s best cinema brands" to deliver an unparalleled consumer experience with a network of approximately 1,550 screens, as on date, they said. "The combination would augur well for the growth of the Indian cinema exhibition industry, besides ensuring tremendous value creation for all stakeholders, including customers, real estate developers, content producers, technology service providers, the state exchequer and above all, the employees.", it said.

"While strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity would also work towards taking world-class cinema experience closer to the consumers in Tier 2 and 3 markets," they said. For the financial year ended on March 31, 2022 PVR has reported a revenue of Rs 1,409 crore. The box office revenue of PVR was at Rs 670 crore and average ticket price was at Rs 235 crore. Its total number of admissions was 3.3 crore.

PVR CEO Gautam Dutta said in FY22 business in January and February was impacted by the lack of new content and capacity restrictions. However, due to the low severity of the omicron variant, state governments abstained from completely shutting down cinemas and producers were quick to announce their fresh release dates.

"The resilience shown by the company over the past 2 years and the rapid pace of recovery in admissions, once new content was made available, has further reinforced our belief in the strength of the PVR brand. We are very bullish on the prospects of the business and firmly believe that the best is yet to come," he said.

In FY22, PVR took significant initiatives around its business, such as alternate forms of content in its cinemas.