PVR Inox's joint venture (JV) with Devyani International will help the company pivot from being a pure-play cinema exhibitor to also having a large role in the booming food and beverage (F&B) segment, a top company official said.

The multiplex operator recently inked a JV with Devyani International, which runs quick-service restaurants (QSRs) like KFC and Pizza Hut. Devyani will own 51% of the JV, with PVR holding the remaining 49% stake.

Speaking to analysts during the Q4 earnings call, PVR Inox executive director Sanjeev Bijli said the JV will allow the multiplex chain to grow its pre-ticketing F&B business.

Currently, it earns most of its F&B revenue post-ticketing, which is only when a consumer buys a movie ticket.

"We felt this partnership was a win-win one because we get to have some F&B revenues, which are pre-ticketed. We can get the opportunity to come up with some branded food courts," Bijli said.

He noted that most shopping malls lack branded food courts, and PVR Inox, which attracted 150 million moviegoers in FY24, can add value in this area.

The branded food courts are expected to help PVR increase its wallet share among existing consumers.

In FY24, PVR Inox's revenue from the sale of F&B jumped 21% to Rs 1958 crore, while F&B spend per head rose 11% to Rs 132.

PVR Inox will bring value to the JV in the form of negotiating better rental deals and locations with real estate developers. The food courts will be located adjacent to PVR Inox cinemas.

While declining to comment about the investments being made by the JV, PVR Inox CFO Nitin Sood said the initial plan was to open 5-6 food courts. "We are still in the process of developing a long-term business plan."

Bijli said the exit quarter of FY24 was soft due to the impact of the general elections on new movie releases and the underwhelming performance of Hindi films. In FY24, PVR Inox recorded the lowest quarterly collections of Rs 759 crore in Q4 due to box office volatility.

The company is expecting box office collections to improve post-elections due to a strong slate of Hindi and Hollywood movies.

PVR Inox is also transitioning to a capital-light model by reducing overall capex in FY25 by 25% from Rs 700 crore in FY24. The company is planning to install 120 screens at the gross level. The net screen addition is expected to be 50–60, as it is looking to phase out 60–70 screens.

The company is also adding screens through franchise-owned company-operated (FOCO) model under which the developer will make the entire investment in the cinema property while PVR Inox will generate revenue through management fee.

PVR Inox is looking to monetize real estate assets worth Rs 300–400 crore that it inherited from the Inox merger. The proceeds from the sale of real estate assets will be used to pay off debt.

Mumbai: Multiplex chain PVR’s screen expansion in 2022 has been skewed towards South India due to the rapid mall development activity in that region, its chairman Ajay Bijli said. “We are South-skewed in terms of screen expansion this year because a lot of malls have come up in the South,” he said. “We are joined at the hip with mall development, which changes every year from region to region. This year, it just so happens that the retail expansion has happened in the South.”

Bijli said PVR aims to open its Director's Cut format in every major city in the country. “In the first phase, we will look at Delhi, Mumbai, Hyderabad, Bengaluru, Gurugram, and Noida. The second phase will be smaller cities,” he said. “This year, our capital expenditure for screen expansion would be Rs. 350 crore.” The average cost per screen is Rs. 3 crore, he added.

PVR will launch its first super luxury cinema format PVR Director’s Cut in South India in Bengaluru on December 9, Bijli said. With this launch, the multiplex chain will have 88 screens in 12 properties in Bengaluru and 316 screens across 51 properties in South India. PVR has set a goal to open 100 new screens every year. It has opened 44 screens so far this fiscal, and is aiming for 20 more screens in this quarter with plans to add another 35 in Q4.

On its merger deal with Inox, Bijli said the same will be closed this fiscal year. “We have got all the necessary approvals but there are still one or two approvals left,” he said. “Everything is on track. Hopefully, in the next couple of months, we should be done with it.”

PVR chief financial officer Nitin Sood said, “We are waiting for the final approval from the NCLT because the regulatory authorities must give their consent as a part of the process. If they don't have any objections, the tribunal passes the order for the merger. Our next date of hearing is scheduled mid-December. ”