PVR Ltd

PVR Limited (PVR) is the largest cinema chain in India. Started in 1997, PVR has been synonymous with ‘movie‑experiencing’, having introduced multiple cinema formats through the years, across the length and breadth of the country. The company is supported by complementing entities of the Group like the Movie Distribution business (PVR Pictures), the Gourmet Popcorn Manufacturing business (Zea Maize) and Movie on Demand business (Vkaao).

With a customer-centric approach and growing business of high-quality cinemas, the company devotes undivided focus to innovation and delivers the best movie-viewing experience thereby making PVR the most preferred chain of cinemas in the industry.

Ajay Bijli (Chairman & MD) has BA Honours (Commerce) Hindu College, University of Delhi and has attended the Owner/President Management Program at Harvard Business School. He started his career in 1997 and built the company from a single screen to more than 750 screens today. His aim has been to make movie viewing a great experience. He is a visionary who changed the way we watch films in India.

Revenue Breakup:

Box Office Admission:
PVR is one of the most premium film exhibition companies in India. It has reinvented the concept of entertainment for all cinema goers, thereby building a stronger brand value.

During the year, it witnessed a significant growth in revenue on release of Bahubali, Padmaavat, Tiger Zinda Hai, Toilet-Ek Prem Kata, SonuKeTitu Ki Sweety, Padman, Badhaai Ho etc. These films fetched more than 7.5 crores viewers. The company is expected to keep the box office momentum going on account of new line-up for FY19 & 20 (Uri, Thackeray, Bharat, Kesari, Mission Mangal, Housefull 4, Bharat, Brahmastra). The company has witnessed healthy viewer growth in the past and is expected to keep the momentum going forward on account of new releases and new screen additions. We expect the viewer growth of 17% in FY18-20E.

Food & Beverage - In F&B, the company offers best-in-class variety of snacks and has the highest revenue contribution in total revenues compared to its peers. The revenue from F&B is on the rise in spite of the high court order of decreasing GST rates from 18% to 5%. This was mainly because of higher spend by movie goers on F&B.

Advertisement - PVR leads in the screen advertising space in India. The revenues from this segment have almost doubled to that of its closest peers. The premium brand of PVR helps the company to garner premium pricing from the advertiser. Apart from having exclusive tie-up with PepsiCo, the company has also partnered with several brands like Vivo, Oppo, OnePlus, etc.

Acquisition of SPI Cinemas:
In Q2FY19, the company acquired SPI Cinemas by taking 71.7% stake in the company. The company plans to make SPI Cinemas a wholly owned subsidiary by taking over the balance 29.3% stake for which it has made an application to the regulator. This is expected to be completed by FY19 end. The acquisition of SPI Cinemas will help PVT capture the viewer base in Southern India. SPI Cinemas operates 76 screens in ten cities under several brands such as Sathyam, Escape, Palazzo, The Cinema and S2 Cinema.

Screen Additions:
The company is expected to open 90 screens in FY19. So far in H1FY19, it has opened 34 screens; screen additions are expected to accelerate in H2FY19. This will generate additional revenues for the company.

Currently, the company has nearly 750 screens in the country and in next 3-4 years, it is expected to add 800-1000 screens for a capital outlay of Rs. 2,500-3,000 crores. This capex would be funded by mix of debt and internal accruals.

Planning new low-cost cinema brand:
The company is planning to cater to Tier III and IV cities for which it plans to launch a new low-cost cinema brand. The management has given a Capex guidance of Rs. 425 to 450 crores for PVR and Rs. 20 to Rs.25 crore additional capex for SPI Cinemas.

GST to give additional boost:
The government has lowered the GST rates on Cinema; for tickets costing up to Rs. 100, the rate has been reduced from 18% to 12%; for tickets costing more than Rs. 100, GST has been lowered from 28% to 18%. This move by the government would increase the number of viewers by making cinema more affordable.