Leading multiplex operator PVR INOX has announced its plan to close approximately 70 non-performing screens in the fiscal year 2025 (FY25) while simultaneously adding 120 new screens. The strategic decision comes as part of the company’s ongoing efforts to focus on profitable growth and optimize its real estate portfolio. The closures will primarily target underperforming locations, with potential monetisation of non-core real estate assets in key cities such as Mumbai, Pune, and Vadodara.
Expansion Plans Despite Screen Closures
Despite the planned closures, PVR INOX remains committed to expanding its presence across India. According to the company’s annual report, 40% of the new screens will be launched in South India. This move aligns with the company’s medium and long-term strategy to increase its market share in underpenetrated regions. PVR INOX aims to add 120 new screens in FY25, demonstrating a balanced approach between closing non-performing screens and tapping into new markets.
Transition to a Capital-Light Growth Model
In an effort to reduce capital expenditure on new screen additions, PVR INOX is shifting towards a capital-light growth model. This transition is expected to lower the company’s capex on new screens by 25% to 30% in the current fiscal year. The company is also considering a shift towards a franchise-owned and company-operated (FOCO) model. This strategy will involve partnering with developers to jointly invest in new screen capex, which is expected to speed up the expansion process and enter underrepresented markets.
Monetisation of Real Estate Assets
PVR INOX is exploring the monetisation of its owned real estate assets as part of its goal to become a “net-debt free” company in the foreseeable future. The company is focusing on potential monetisation of non-core real estate assets located in prime locations like Mumbai, Pune, and Vadodara. Addressing the shareholders, Managing Director Ajay Kumar Bijli and Executive Director Sanjeev Kumar emphasized the importance of this strategy in achieving financial stability and growth.
Financial Performance and Debt Reduction
During the current fiscal year, PVR INOX opened 130 new screens across 25 cinemas while closing 85 underperforming screens across 24 cinemas, adhering to its strategy of focusing on profitable growth. The company’s net debt stood at Rs 1,294 crore in FY24. However, PVR INOX successfully reduced its net debt by Rs 136.4 crore in the last fiscal year, as reported by CFO Gaurav Sharma.
Conclusion
PVR INOX’s strategic decisions to close non-performing screens, focus on expansion in underpenetrated markets, and monetise non-core real estate assets reflect its commitment to achieving profitable growth and becoming a net-debt free company. By transitioning towards a capital-light growth model, the company aims to optimize its operations and maintain its position as a leading player in the Indian multiplex industry.
