PVR INOX to shut down 70 non-performing screens across India
PVR INOX, a leading multiplex operator in India, has announced its plan to shut down approximately 60-70 underperforming screens in the fiscal year 2025. This decision is part of the company's strategy to focus on profitable growth. The information was disclosed in its latest annual report. Despite these closures, PVR INOX intends to open an additional 120 new screens during the same period.
PVR INOX's strategic focus on South India
The company's expansion plan includes a strategic focus on South India, a region currently underrepresented in terms of multiplexes. Approximately 40% of the new screen additions are expected to be located in this region. This move aligns with PVR INOX's medium to long-term strategy, which aims to tap into the high demand for films in South India and address the comparatively low number of multiplexes there.
PVR INOX's shift toward a capital-light growth model
PVR INOX is transitioning to a capital-light growth model, aiming to reduce its capital expenditure (capex) on new screen additions by 25-30% in the current fiscal year. The company plans to partner with developers for joint investment in new screen capex, adopting a franchise-owned and company-operated (FOCO) model. This strategic shift is part of PVR INOX's broader plan to become a "net-debt free" entity in the near future.
PVR INOX considers monetizing non-core real estate assets
PVR INOX is considering the monetization of its non-core real estate assets located in prime locations such as Mumbai, Pune, and Vadodara. This was revealed by Managing Director Ajay Kumar Bijli and Executive Director Sanjeev Kumar in a statement to the company's shareholders. The move is part of PVR INOX's broader strategy to reduce debt and increase profitability.
PVR INOX's financial performance and future projections
In FY24, PVR INOX reported a net debt of ₹1,294 crore. However, the company managed to reduce its net debt by ₹136.4 crore last fiscal year. Despite a revenue of ₹6,203.7 crore in FY24, the company incurred a loss of ₹114.3 crore. CFO Gaurav Sharma stated that while they are reducing capital expenditure, they will not compromise on growth and plan to open nearly 110-120 screens in FY25.
