PVR INOX Ltd Q4 2025 Earnings Call Transcript

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

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : My first question is on the Hindi movie tent. So last week, when the geopolitical risk was there, we did see on Hindi movie shift to OTT. So if you could discuss are there more such examples or it was a one-off because of the geopolitical issue at that time? And the Hindi pipeline, it is the last few quarters, always we are seeing bouncing up and then weeks when no content is there. Is that issue getting resolved in terms of proper planning of the pipeline for the Hindi?

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : And the second question is on the expansion plan. Two parts to this. One is the FY25 net addition was hardly anything, five screens only. And now pan is to open, say, 100 to 110 screen in FY26. Could you tell us in terms of closure FY26, what's the current number looking like? And second is in terms of your new initiative of low CapEx to size and contracts, what has been the initial response of the developers? And any tweeting needed, what is the feedback, if you can share on that?

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : So one follow-up, and that is the last you've given guidance for new screen addition in terms of the CapEx light model and management contract, what is the number you have in mind currently? It may not be a strict guidance because the talks are ongoing. But what will be the intent that most of the new expansion will be essentially through these two routes and any existing properties also where say renewal is going to happen, do you think there could be a substantial number from there also?

Question: Abneesh Roy - Nuvama Institutional Equities - Analyst : And one side screen director's cut in Noida, which is into an asset-light model. So you will see bulk of the screen this year will be under that model.

Question: Jinesh Joshi - Prabhudas Lilladher (Pvt) Ltd - Analyst : Sir, I just want one clarification. I mean, out of the 100 to 110 screens that we plan to open in FY26, how many of them will be on FOCO models? Because ultimately, a road will not be consolidated into our P&L, and the actual opening number could be slightly lower. So can you just share the FOCO count for FY26? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 10:30AM, PVRL.NS - Q4 2025 PVR INOX Ltd Earnings Call

Question: Jinesh Joshi - Prabhudas Lilladher (Pvt) Ltd - Analyst : Got that. And sir, one bookkeeping question. So while our other income is about 40% in this quarter, and we have stated in the footprint that it is predominantly due to income from distribution of movies like Sky Force, et cetera. But if I look at our move distribution and print cost, that is down 10% YoY. So can you please explain the reason behind the cost reduction when the income is up quite substantially?

Question: Jinesh Joshi - Prabhudas Lilladher (Pvt) Ltd - Analyst : Is this a new normal? I mean, I understood what you're trying to convey. But the margin this time around on distribution appears to be quite high. So is there any change in terms, which you would want to highlight, this is something which is kind of slightly one-off in nature?

Question: Jinesh Joshi - Prabhudas Lilladher (Pvt) Ltd - Analyst : Got that. Sir, just one small clarification from my side. I think under the asset-light model, I mean, we have mentioned that the developer fund maturity of the CapEx and perhaps it is compensated by the MG and rev share. But do these properties also get capitalized on the balance sheet as ROU or how does it work out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 10:30AM, PVRL.NS - Q4 2025 PVR INOX Ltd Earnings Call

Question: Jinesh Joshi - Prabhudas Lilladher (Pvt) Ltd - Analyst : Got that. Sir, just one small clarification. The ROE figure that has fallen from [24] to [25], that would predominantly be because of the closures, right? Particularly a closure.

Question: Umang Mehta - Kotak Securities - Analyst : My question was on the cash balance. So while we acknowledge that gross debt has come down. Any specific reason why we are accumulating cash, especially since incrementally CapEx is expected to decline.

Question: Umang Mehta - Kotak Securities - Analyst : Understood. And the second related question was CapEx. So you mentioned that it will increase to INR400 crores plus because you'll be renovating more than what you did in last year. Would it be possible to list the CapEx in maintenance and new selling market effect?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : My question is on the asset-light models. So we have signed around 11 cinemas and management contracts and 12 in asset-light model. So based on this, can you explain us what kind of developers are going for management contract and what kind of developers are going for asset light? Is there any commonality about this geography, geographically or the size of the developer, some light on the details?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : Sorry, I didn't understand this leverage, can you just explain?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : Right. So does the developer has a say on this? Or it's we present in this option and he has to chose other than that?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : Sir, I mean, whether you can choose, say, we are offering him a management free model. Can the developer says, no, I want an asset-light model. or I want a traditional model where it needs to be completely leased out?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : Okay. Understood. And when we are designing the -- so for example, in asset trade model, you have mentioned 40% to 80% CapEx by developer. How this is also decided?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : So on a REIT-based business model, he has a very little double side?

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : Okay. So this 9% or 8% yield is in respect to our content quality how the content has performed so that is basically --

Question: Arun Prasath - Spark Capital Advisors (India) Private Limited - Analyst : Understood. Finally, on the existing set of 1,700 screens, is there any possibility we will transition as and when the lock in period ends or as and when the contract ends, we will give an option to the developer to --

Question: Abhishek Kumar - JM Financial Institutional Securities Pvt. Ltd. - Analyst : My question is also on the FOCO model. I'm still not able to figure out why is it attractive for a developer. I mean, this is a business where you despite the scale and so much efficiency making barely breaking even. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 10:30AM, PVRL.NS - Q4 2025 PVR INOX Ltd Earnings Call And that if the developer has to give you 10% of the revenue. For in the little expertise and a little benefit of scale, how will he make money? Isn't it more beneficial for him to just take 15% of rent of revenue and lead the operational spend the cost associated with you?

Question: Abhishek Kumar - JM Financial Institutional Securities Pvt. Ltd. - Analyst : Okay. My question was more around whether if we have to choose between a FOCO model and the traditional model, and not very clear if the risk reward favors developer when -- how the Bollywood and then exhibition business is performed?

Question: Pankaj Mendiratta - Bank of America - Analyst : Three quick questions from my side. First one, your thoughts on Karnataka government budget announcement on capping the movie prices at [INR200]. Where are we how much impact do you see? Have you gone back to the government and ask for further concessions out there?

Question: Pankaj Mendiratta - Bank of America - Analyst : Got it. Cool. Second question is around the use of cash. So assumption is there is nothing inorganic as an opportunity probably out there. So would the Board have thought around doing dividends again or some buyback? Is there a sort of conversion happening around or not really?

Question: Pankaj Mendiratta - Bank of America - Analyst : Got it. And so is it safe to say that once that happens and if there are the sale proceeds from the management contract cinemas, then one might expect that as a bullet payment for dividend? Could that be a scenario?