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PVR Inox to close 70 screens in FY25, reduce capex, implement new growth plan

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In Short:

PVR Inox Ltd is making changes to improve its financial performance. They are closing underperforming screens and adding new ones in the south Indian market. The company aims to reduce costs and become debt-free. They are focusing on profitability through initiatives like movie passes and discounts. Despite losses in the past, they are optimistic about future growth.

Strategic Overhaul at PVR Inox Ltd: Optimizing Resources and Maximizing Returns

PVR Inox Ltd is making significant changes to its operations to ensure optimal resource utilization and improve profitability. The company recently announced its plans to close 70 underperforming screens in FY25, following the closure of 85 screens in the previous fiscal year.

Aggressive Expansion Plans

However, it’s not all about closures. PVR Inox is also gearing up for an aggressive expansion phase with the launch of 120 new screens in FY25, focusing on the lucrative south Indian market.

Shift Towards a Capital-Light Model

The company is emphasizing a move towards a capital-light model by reducing capital expenditure by 25% in the upcoming fiscal year. It aims to achieve operational efficiencies by renegotiating rental agreements, streamlining organizational structure, and implementing cost-control measures.

Aim for Debt-Free Status

PVR Inox has set a key priority to become debt-free and is exploring options to monetize its real estate assets, valued at ₹300-400 crore.

Strategic Priorities for Growth

The company has outlined four strategic priorities to drive medium to long-term growth. These include enhancing profitability of existing circuits through initiatives like Movie Passport, Cinema Lovers Day, and screening events like film festivals and live concerts to boost revenue.

Financial Performance

In the fourth quarter of FY24, PVR Inox reported a consolidated net loss of ₹130 crore, down from ₹333 crore in the previous year. Operating revenue increased by 10% to ₹1,256 crore during the same period.

Overall, the company’s loss narrowed to ₹32 crore in FY24 from ₹335 crore in FY23, with revenue growing from ₹3,751 crore to ₹6,107 crore.

Challenges and Future Outlook

The company faced challenges in the last quarter, with subdued performance due to factors like underperforming films and the impact of general elections. However, PVR Inox is optimistic that the situation will stabilize by mid-June.

Ajay Bijli, Managing Director of PVR Inox Ltd, expressed confidence in the new growth strategy, focusing on cost reduction and enhancing profitability to generate better returns on investment.

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