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PVR Inox - Blockbuster or Flop? 🎥

When the King of Bollywood and the OG Villain of Tollywood star in a movie together, it is bound to break records. Jawaan, released in September 2023 hit a total box office collection of Rs. 1,100 crore, making it among the top 5 highest-grossing Indian films of all time!

Movies like Jawaan and Gadar 2 break box office collection records, as the Indian audience always reacts positively to mass movies. However, with the success of Oppenheimer and Barbie, there has been a shift in perspective on the consumption of content by the audience.

But such iconic films are released once in a while, making the rest of the months dry for business. Hence, the success of the movie theatre business is directly proportional to the success of a film; which is subjective to audiences and dependent on the release of blockbusters.

Luckily, for PVR Inox, 2023 was such a year; marked by dozens of such super hit movies, skyrocketing footfall and ticket sales up (oh yes, popcorn sales too). But ‘luckily’ is not the operative word either a business or an investor in the business would want.

The good part though is that PVR Inox has been actively making efforts to move away from this high-dependence-situation and into something more predictable. We’ll talk about just 4 out of these, that wouldn’t just make the business healthier, but also perhaps make it more investment-worthy.

1. Regional Expansion

Traditionally, the size and scale of Bollywood has been unmatched, thanks to the uniformity of Hindi across the country. This led to a network effect, where money was of course made the most by Hindi movies, and the availability of funds for production and marketing was also the highest here.

However, that is changing. Imagine this, while Jawan made Rs. 1,125 crore, Jailer which is a Tamil movie made Rs. 525 crore. And it doesn’t stop at that. A Marathi movie named Baipan Bhari Deva collected Rs. 70 crore, Punjabi movie Carry on Jatta 3 made over Rs. 100 crore, and Telugu movies Kushi and Bro made Rs. 50 crore and Rs. 150 crore respectively.

Big bucks have been flowing into regional cinema, which improves production quality, boosts marketing budgets, and eventually, this translates into more theatregoers. Additionally, while regional movies had been restricted to local theatres, multiplexes like PVR Inox have been cashing in on the big trend.

Post-merger, PVR Inox has 1,700 screens across 109 cities making up 18% of the total screens in India. With more regional movies doing well, and audiences wanting a better experience, banking on the regional movie pick-up also goes in sync with PVR Inox’s move towards less dependence on Hindi blockbusters.

2. No Movie, No Problem

Despite all the hits that have come out in 2023, guess what occupancy rate PVR Inox strikes? All of 26%. In a business like this, if you increase the occupancy rate, you will automatically make more money.

To diversify content further, and utilise the experience infrastructure to a larger extent, PVR Inox has added films like Taylor Swift: The Eras Tour and the BTS Movie. Additionally, the company also intends to get streaming rights for sporting events, like the Cricket World Cup.

It also intends to launch a special trailer-viewing experience, where people can pay a nominal amount to view trailers of 30 movies, 3 months prior to release, with data suggesting that 45-50% of those people end up buying a ticket to those new releases.

With multiple artists releasing their concert films and the craze for sport is ever-growing, this could be a huge source of revenue inflow.

3. Cinema Express

To further increase predictability, and hence improve footfalls and financial performance, PVR Inox has introduced a subscription model.

The PVR Passport Plan allows consumers to watch ten movies in a month, on any weekday for Rs. 699. Currently, PVR Inox has introduced it under a limited-period offer and with only 20,000 subscriptions. For the company, this is an assured advance in hand.

The plan also has a lock-in period of three months. So, consumers need to continue their subscription for a minimum period of three months once they buy it. Additionally, they have also introduced food combos starting from Rs. 99 from Monday to Thursday.

If we do the math right - one movie would cost Rs. 70, paired with a food combo of Rs. 99 which would still be cheaper than a normal ticket which on average costs Rs. 276. This affordable pricing pushes people to watch films even if they don’t have a star cast or strong storyline and also encourages consumers to watch movies even on weekdays.

4. Grab A Bite

Did you know, that 32% of PVR Inox’s entire revenue comes from food and beverage (F&B) sales? On average, while a movie-goer's spend Rs. 276 on tickets, they also spend Rs. 136 on F&B.

The average ‘spend-per-head’ has increased from Rs. 96 in FY2021 to Rs. 136 in FY2023, a solid 41% growth, in just 2 years. What’s a movie without overpriced popcorn and coke after all?

But to kill the infamy of overpricing, and drive more people to grab a bite, PVR Inox has now introduced offers that would not have to burn a hole in your pocket to munch at the theatres. Along with the Rs. 99 food combo and unlimited refills on a ‘large’ meal order, there is also a variety of options to choose from.

While this reduces the average spend per person, the strategy is for the volumes to increase. With it being cheaper, more people would spend on F&B, thereby increasing revenue from F&B for PVR Inox. movie-goers, and we guess it’s working. Despite this strategy, PVR Inox saw an increase in revenue from F&B of 89% YoY.

Hit or Flop?

Over the next quarter, the momentum in good movie releases continues to be strong. Upcoming releases like Tejas, The Marvels, Tiger 3, The Hunger Games and Aquaman ensure a healthy content line-up, which is likely to keep the current financial momentum strong.

In 2QFY23, PVR Inox had posted its highest-ever revenue, EBITDA and PAT. Over FY23-25, on account of the overall upping of India’s content game and because of revenue addition/diversification initiatives taken by PVR Inox, revenue is expected to see a 40% CAGR.

In the movie theatre business, there is a high operating leverage. High revenue growth automatically leads to higher margins. Additionally, the recent merger between PVR and Inox is likely to lead to cost synergies, adding to profit drivers. With this PVR Inox can strike a 60% EBITDA CAGR over the next 2 years.

This would also enable PVR Inox to move from a loss of Rs. 335 crore in FY23 to a healthy profit by FY25. But financial performance aside, there could also be a valuation re-rating potential PVR Inox given the addition of predictability and consistency in revenue streams. After all, climaxes and anti-climaxes are great for movies, but investments can do better without them!


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Alphaware Advisory Services Private Limited [SEBI RIA Registration No: INA000015747] [Validity of registration: February 08, 2021-Perpetual] [BASL ID: 1610] [Address: 1 Janki Centre, Off Veera Desai Road, Andheri West, Mumbai 400053] [Principal Officer details: Mr. Sagar Lele, Email id:, Contact No. +91-9769770046] [Compliance Officer details: Mr. Sagar Lele, Email id:, Contact No. +91-9769770046] [Grievance Officer details: Mr. Sagar Lele, Email id:, Contact No. +91-9769770046] [Platform Partner: smallcase] [CIN – U74999MH2019PTC320573] [GST No: 27AARCA8847R1ZF]

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