A key priority for PVR-Inox currently is improving margins through better capital and operating expenses, says managing director Ajay Bijli. In an interview with ET’s Vinod Mahanta and Javed Farooqui, Bijli talks about the contours of the deal to merge the two companies that has created the world’s fifth largest multiplex chain and what lies ahead for the combined entity. Edited excerpts:

This (multiplex) business has always been about scale. Only when you reach a certain scale, do economies kick in. Achieving a certain scale allows for operating and cost efficiencies, as seen in large companies worldwide with 4,000-5,000 screens or more. The pandemic completely devastated our balance sheets and business. And, the best way to make our balance sheet stronger and address the challenges we faced was through the merger. The merger allowed us to take on the challenges that lay ahead in the the exhibition industry. But it also means we have more responsibility now with more screens, seats to fill, people to manage, and expectations to meet.

Fortunately, the integration process is going well. We started with the day-one structure and prioritized bringing people together. We hired Kornferry about three–four weeks ago to assist with this process. We developed the day-one structure to give clarity on everyone's roles and responsibilities, which was essential for our 23,000–24,000 employees. Now we are looking at synergies in every revenue line, and we have launched a new 100-day initiative called Parikrama. We're currently exploring ways to improve various aspects of our business, such as ticket prices, advertising revenue, and cost items, whether its capex or opex. There are about 13-14 initiatives that are going on simultaneously, which BCG is monitoring. We've informed the markets that it will take at least 12-24 months before we start seeing the benefits of our efforts. We have given it a value of Rs. 225 crore in synergy.

I have been appointed as the MD of the company by the board and shareholders, along with the Jain family as executive directors with equal representation on the board. The chairman is Pavan Jain. As MD, I am responsible for running the company for the next five years. At the operating level, we have two co-CEOs due to the large scale of our operations. We have roughly 1,700 screens, including 180 that are currently being fitted out. So, the span of control of Gautam Dutta, who is CEO of North and South, is equivalent to the span of control of Alok Tandon, who is looking after West, East and Central. Our focus is on economies of scale and adopting best practices from both companies.

Occupancy rates vary by region, with the South having reached pre-Covid levels while West, North and East have not. We do think the ticket prices will hold. They haven't gone up by that much; it’s less than inflation in a three-year period. By the way, minimum wages have gone up, electricity has gone up, and so have all input costs. We have stayed below inflation.

Everything is dependent on footfall — all our revenues are binary. The FY23-24 line-up is looking good. We have Ajay Devgn’s Bholaa releasing now, and John Wick: Chapter 4 has been released and has gotten a lot of traction. Then we have Karan Johar’s Rocky Aur Rani Ki Prem Kahani. Ajay Devgn’s Maidaan is coming.