India's top multiplex chain PVR Inox is cutting down screen expansion as well as capital expenditure but at the same time opening more cinemas in the South market, the star of its growth story.
The exhibitor that is bringing down its capital expenditure by 25 percent to Rs 450 crore in FY25 from Rs 620 crore in FY24 will be adding 30 percent of its new screens in the South market.
"While our growth strategy and capex is lower than last year, our strategy is to focus on South India this year and next year. In South, we have four complexes (cinemas) coming up in Hyderabad out of which two of them are complete and we are starting work on the other two. One property is coming up in Hubli. That's the South India growth happening this year," said Sanjeev Bijli, Executive Director, PVR Inox.
The theatre chain on May 31 launched its first multiplex, a three screen property, in the small town of Machilipatnam in Andhra Pradesh, a state with one of the highest movie going index in India, said Bijli.
PVR Inox's last two launches were also in South, including a 14-screen property in Mall of Asia in Bengaluru and a cinema in Kochi.
Bijli said that South India's share will continue to be higher in the overall screen portfolio of PVR Inox. The region is already leading with 33 percent share followed by North India at 26 percent, the West at 21 percent, Central India at 12 percent, and East has the lowest share at eight percent.
In the first three months of 2024, South Indian language movies had the highest share of 51 percent in India's box office business, surpassing Hindi language movies that accounted for 36 percent share.
Malayalam movies have stood out this year among south Indian languages. April was the first month ever in Indian cinema where Malayalam became the highest grossing language, with 35 percent share of the month's domestic box office business. Movies like Aavesham, Manjummel Boys aided the strong run.
Along with the winning streak of Malayalam movies, Bijli is betting big on the upcoming releases especially from down South.
"This is the year of South Indian films with Kantara 2, Indian 2, Kalki 2898 AD. With a strong movie pipeline of southern films, we were focused on opening new multiplexes in Kochi, Bengaluru, Andhra Pradesh, Hyderabad. It only enhances our revenue in establishing these centres because the South Indian language lineup is very strong," he said.
While South India is dominated by single screens with a 60 percent share, Bijli expects the multiplex pie to go up in the region.
"There is still a lot of single screen proliferation in southern states and that contributes heavily to the total box office numbers. Single screens will not go down but the proliferation of multiplexes will go up because there are many markets there which are unserved. These markets are at the cusp of development," the executive director noted.
Like Machilipatnam in Andhra Pradesh, PVR Inox is eying the smaller towns to launch newer screens.
"We consciously want to grow in smaller towns because after the metros where maybe the retail and mall development is slowing down, the next growth engine will be smaller towns. After the election results, we think the new government will be focusing on next engine of growth which are tier II, III cities. So, we are looking at opportunities in these cities, where organized retail development such as malls, cinemas, food courts hasn't happened yet but is bound to happen and when it happens we want to be a part of it," Bijli said.
He is also expecting a steady flow of content June onwards.
"April and May were muted because of elections. But from June when we have movies like Kalki 2898 AD, Chandu Champion releasing we will see admissions going up."
Admissions have been 25-30 percent lower across the exhibition industry in the post Covid period. In addition, a dry spell in content supply is putting pressure on PVR Inox that had reported a weak March quarter. In Q4 the company was back in red after two quarters due to failure of big budget Bollywood films at the box office.
While PVR Inox narrowed its losses to Rs 130 crore in Q4 FY24 from Rs 333 crore during the same period a year ago, sequentially its performance declined as it had reported a profit of Rs 12.8 crore in Q3 FY24.
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