PVR INOX Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Abneesh Roy - Nuvama Wealth Management Limited - Analyst : Thanks. My first question is on the re-releases. Two, three sub-questions there. One is when I see PVR share versus the India share, it's ranging from 50% to 95% in the three movies where you have given the data. So I wanted to understand why we have such a range, maybe because some are only in your screens and may not be widespread. So I wanted to understand what are the science behind this? Second is in a year, how many movies would you be doing in terms of re-releases? For example, October month, again, the current month, Bollywood scheduling seems again quite weak. So are you planning some re-releases again right now? Third is in terms of variable cost, I understand you have got 6% admissions from re-releases. But in terms of variable cost and occupancy, if you could give some data, do you make good profits here? Or it's more of a marketing exercise to increase the movie overall consumption habit as such.

Question: Abneesh Roy - Nuvama Wealth Management Limited - Analyst : Yes, 50% to 95% range between PVR and total in the three examples which you have given re-releases, the range is between 50% to 95%. So why such a wide range?

Question: Abneesh Roy - Nuvama Wealth Management Limited - Analyst : Given ATP is lower and my sense is occupancy also would be lower, if you could tell us in terms of variable cost, would you be making money here in terms of do you take that into account?

Question: Abneesh Roy - Nuvama Wealth Management Limited - Analyst : Yeah, it was again related to this one. So who is doing the planning for this? For example, in October month, again, volume looks reasonably weak. So are there more movies planned in October month?

Question: Abneesh Roy - Nuvama Wealth Management Limited - Analyst : Sure. My second and last question will be on Q3. Last year, Q2 was extremely strong and your expressed optimism that maybe Q3 will also be quite close to it. Given how October month is looking, big week on the Hindi movie side, is your expectation a bit on the optimistic side, given we'll have two months largely to overcome the very strong Q2?

Question: Jinesh Joshi - Prabhudas Lilladher Pvt - Analyst : Sir, I have a bookkeeping question. So if I remember right, our contract with BMS ended some time back. And now I believe the convenience income is variable in nature and ideally it should move in tandem with the box office performance, if I'm not mistaken. Now in this quarter, we saw a 25% fall on a YoY basis in our net box office collection, but the convenience income was down by only 5%. So has there been any revision in grade with BMS this time around?

Question: Jinesh Joshi - Prabhudas Lilladher Pvt - Analyst : Got that. Sir, second bookkeeping question is on the rent expense, which is flat on a YoY basis despite a 2% increase in the weighted average screen count. So if you can share the reason behind it? And also our film hire cost is down on YoY basis. So has there been any change in terms of our agreement with the distributors during the quarter? And the related follow-up is that for re-releases, do we pay a similar film hire cost? Or is it a bit lower?

Question: Jinesh Joshi - Prabhudas Lilladher Pvt - Analyst : And the re-release part, if you can just highlight that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, PVRL.NS - Q2 2025 PVR INOX Ltd Earnings Call

Question: Jinesh Joshi - Prabhudas Lilladher Pvt - Analyst : Understood. Sir, one last question from my side. I think some time back, there was some news article in the media which stated that the Tamil Film Producers Association has called for a temporary halt on all film-related activities from November 1. Any idea whether this will be implemented or you expect some kind of a solution to be figured out by then?

Question: Abhishek Kumar - JM Financial Institutional Securities Limited - Analyst : See, this quarter, in many ways, represent a typical probably period for us where a couple of months were very strong. One month was relatively soft, we did reruns, et cetera. And still, after all that, the occupancy for the quarter was 25.7%. So is that the new normal that we should look at in the movie exhibition business? Because obviously, we can't expect every quarter to be like Q2 of last year or Q3 of this year. So just your view on what should be the new normal for occupancy? And if it has to go up on a sustainable basis, what would it take for the occupancies to move up?

Question: Abhishek Kumar - JM Financial Institutional Securities Limited - Analyst : Okay. That's helpful. So just picking up on that, based on your conversations, do you think that the pipeline for next year by studios, et cetera, is looking better compared to what it has been so far this year in terms of just the quantity?

Question: Abhishek Kumar - JM Financial Institutional Securities Limited - Analyst : Great. That's very encouraging. One last question on your operating leverage. Has it kind of run its course. By that, what I mean is if the occupancy stays where it is, is this the level of margins or fixed cost that we should expect for our models going forward?

Question: Arun Prasath - Spark Institutional Equities Private Limited - Analyst : My first question is on the F&B spends. If you look at this metric for last four to five quarters, we are more or less -- this number is more or less stable. So have we reached a maximum that we can extract out of the footfalls via the -- without the price increase? Is it -- from here the way forward is strongly the price increase? Or how we should think about it on this line item?

Question: Arun Prasath - Spark Institutional Equities Private Limited - Analyst : Okay. Understood. Fair enough. And secondly, the capabilities of closing of the nonperforming screens. Can you help us understand -- obviously, we will be closing only if, say -- obviously, for the malls, which are (technical difficulty) you will be closing no matter what is the rental is. In those cases where the closure is because of the mall is good, but you closed it because of the nonperformance, that part of the operation is that closure is done or still it is an ongoing process?

Question: Arun Prasath - Spark Institutional Equities Private Limited - Analyst : Okay. Actually, what I was trying to understand is, what percentage of our, say, underperforming screens is yet to be renegotiated for any rentals if other than the mall -- that is a closure of the mall or other than the location issues and apart from that, is there any scope we have still some 30%, 40% of properties, which is not under -- is not yet renegotiated, but that will lead to a better rental cost control going forward? That commentary, can you just give some understanding for us?

Question: Arun Prasath - Spark Institutional Equities Private Limited - Analyst : Finally, we spoke about a lot of emphasis on the increasing the screen presence in South. South is, obviously, beyond the top cities. If you look at the Tier 2, Tier 3 cities, the supply of mall may not keep in place. So how we are planning to address this supply issue because obviously, we will need some developer support to increase our screen share in the South.

Question: Arun Prasath - Spark Institutional Equities Private Limited - Analyst : And these new shopping malls or shopping centers, this will be an asset-light model for us?

Question: Arun Prasath - Spark Institutional Equities Private Limited - Analyst : So developer has to contribute a substantial CapEx?

Question: Umang Mehta - Kotak Securities (Institutional Equities) - Analyst : Just continuing the last question. So what is the new screen guidance for next year FY26, and the CapEx guidance for the same? And what would be the mix of FOCO and management properties within that plan?

Question: Umang Mehta - Kotak Securities (Institutional Equities) - Analyst : Understood. Then maybe Gaurav could help. So in terms of CapEx, should we expect decline from INR475-crores-odd, which you expect this year given that asset light is fairly high?

Question: Umang Mehta - Kotak Securities (Institutional Equities) - Analyst : Understood. Makes sense. And just my second question, it is not related to your core business, but on the food delivery business of PVR Cafe, anything you can share on that, any current plans to scale it up or anything on that?

Question: Naveen Baid - Nuvama Asset Management - Analyst : This is also in line with what the previous speaker had asked. What should we model in terms of annual occupancy ratios since this is mostly become a eight- to nine-month kind of a business model with IPL every year and some of the other events and T20 World Cup every second year and 50-over World Cup every four years, and many of the sporting events. What should we work with in terms of annual occupancy rate, something that the company is targeting?

Question: Sukant Garg - Equible Research Private Limited - Analyst : So my question is related to the JV that we are pursuing with Devyani International, first one. And my second question is regarding PVR Cinemagic. So I heard news around four months back that there is a new range of cinema screens that has been launched by PVR called PVR Cinemagic, but that's been suspended in a very short span of time. So is there a particular reason for that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, PVRL.NS - Q2 2025 PVR INOX Ltd Earnings Call

Question: Sukant Garg - Equible Research Private Limited - Analyst : So my first question is the state of the JV with Devyani International. When it is going to be launched, when is expected to be launched? And my second question is regarding PVR Cinemagic. So -- which I heard that there is a new set of screens being launched by PVR around May '24 called PVR Cinemagic, but it is suspended in a very short span of time. Why so? So is there any particular reason for that?

Question: Sukant Garg - Equible Research Private Limited - Analyst : Just to follow up on that. For PVR Cinemagic, are we planning to expand that also in other parts of the country? Or it is just going to remain in very specific concept of -- as an experimental experience?

Question: Ketan Athavale - RoboCapital - Analyst : (technical difficulty)

Question: Nitin Sharma - C-Berg Private Limited - Analyst : Firstly, can you please point out how many of this closed screens in the first half include premium format? And then I have a follow-up.

Question: Nitin Sharma - C-Berg Private Limited - Analyst : Understood. And secondly, is there a level of gross that you aim to achieve by end of this year or the next year?

Question: Nitin Sharma - C-Berg Private Limited - Analyst : Yeah. Is there a target debt level that you also achieve by end of this year or the next?

Question: Palvir Bahia - Halo Global Asset Management - Analyst : I just wanted like how do you think about profitability? Just going back to an earlier question, you're at 25% give or take (technical difficulty) relatively good quarter. I appreciate what you're saying about next year. But again, that's very much reliant on the supply of new films and the success of those. In terms of how you're modeling your business, how should we -- and how do you think about the sort of ongoing profitability? What is breakeven for your business? And is it really -- is it really will come down to occupancy for you to generate sustained profitability going from here? And what are the levers do you have to give us confidence that you can sort of sustainably be profitable on a continued run rate from here?

Question: Palvir Bahia - Halo Global Asset Management - Analyst : Okay. It's difficult as analyst to try and just put in an occupancy number which is higher given the trend at the moment. And we've had -- I appreciate you've had a lot of disruption via COVID, with the election. But there's still a lot of hope, it's I think we're getting a lot of questions on this.

Question: Ketan Athavale - RoboCapital - Analyst : Am I audible now?

Question: Ketan Athavale - RoboCapital - Analyst : Yeah. I just wanted your pre-index EBITDA guidance.

Question: Ketan Athavale - RoboCapital - Analyst : I just wanted your pre-index EBITDA guidance.