PVR expecting full recovery over the next couple of quarters: Chairman & MD Ajay Bijli

PVR expecting full recovery over the next couple of quarters: Chairman & MD Ajay Bijli

PVR is fast ramping up its capex plan to open 125 screens by the end of the current fiscal.


Mumbai: At the investor conference call post the announcement of its first quarter results, multiplex chain PVR's chairman and managing director Ajay Bijli, said that the company is expecting a full recovery over the next couple of quarters.

"Given the excellent performance of the movies in the last few months and a very promising lineup of content that is up for release during the rest of the year, we are expecting a full recovery in admissions and advertising income over the next couple of quarters. I believe that this year will be a great year for the company," he added.

PVR CFO Nitin Sood noted that there is still a large segment of people who have not shown up at the cinemas. “Our sense is that it will take a few months for the full recovery to play out as more films get released across theatres, as more genres of films get released across theatres, whether it is Hindi films or big tent poles like Avatar, which will draw consumers back to cinemas. So, the full recovery will take another six months to play out. Our sense is that by December 2022, when we have had a big run of films, effectively, recovery should take shape fully, because you must also understand that in a country like India, there is a very large segment of people who show up at the theatres only once or twice a year. So, for that to play out, you have to give it time and see a full recovery. So, our sense is by the end of December 2022, we should hopefully be able to see some of that."

Offering a quick update on the progress on the proposed merger of Inox Leisure with the company, Bijli said, “Both the companies got no objection certificates from the two stock exchanges, i.e., Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), on the proposed scheme of the merger, and we are in the process of filing our application for the approval of the scheme of merger with the National Company Law Tribunal (NCLT) in the next couple of weeks. I am told that the NCLT process typically takes anywhere between five and seven months, so we seem to be on track.”

Bijli is bullish on the content pipeline moving forward, he added, “The content pipeline in the months ahead looks promising. Over the next few months, we have several big-budget Bollywood movies lined up for release, like “Shamshera,” “Lal Singh Chaddha,” “Brahmastra,” and “Vikram Vedha.” From Hollywood, we have “Bullet Train,” “Paws of Fury,” “DC League of Super-Pets,” amongst others. From the regional genre, we have “Vikrant Rona,” “Liger,” “Godfather,” and “Ponniyin Selvan.”"

On the screen expansion plans, he said that the company opened 14 screens across three properties in the last quarter and is fast ramping up its capex plan to open a total of 125 screens by the end of the current fiscal. "About a third of our new screen additions will be in the tier two and tier three cities, and we will be entering 9 new cities during the year. The entire capex will be funded through internal accruals and liquidity available to the company. Our screen portfolio currently stands at 854 screens across 173 cinemas in more than 75 cities in India and Sri Lanka," he explained.

When asked about Hindi movies not doing well, he said, "No, there is no issue. I think it’s too early; it’s only been three-four months since movies have started coming out, and basically, I am not going to write-off Hindi movies so soon. There are some big movies lined up." He added that one quarter is too short a timeframe to draw any conclusions that only regional terms will dominate and Hindi will not do well anymore.  

He said that people just want to watch whatever appeals to them and it just so happens that two big regional language films did exceedingly well and they overshadowed other releases.

PVR Pictures’ chief of business planning and strategy & CEO Kamal Giachandani noted that Hindi films have done well. "“Gangubai,” “Kashmir Files,” “Bhool Bhulaiyaa,” even “Jug Jug Jiyo,” which came out recently, have all done well. And also, we have to keep in mind that “K.G.F” and “RRR” actually performed a lot better in the Hindi version. Whether you would categorise them as a Hindi film, or would you consider them as a Kannada or a Telugu film, is a matter of debate. It depends on which angle you are looking at it from. But we think of them as Hindi films and the way we look at it is that if “RRR” and “K.G.F,” which are films essentially dubbed into Hindi, can do so well, imagine a Hindi film in the original version with a popular actor or with multiple popular actors, will connect to the audience. Imagine the upper limit for those films. Imagine the potential for those films. So, we see it as a big positive, and those were the three elements that made us think content is done well; these four months have done so well for us," he mentioned.

On the admissions front he said that when the company looks at the lineup that will come in the third and the fourth quarter of the fiscal it feels fairly confident that this could turn out to be a year which will end up with aggregate admissions which are a lot better than what was achieved in 2019- 20. "We feel extremely buoyant looking at the lineup and the response that we have got from the audiences. That said, our business is of hit and miss. I think it’s best to look at it on an annual basis rather than on a quarter-to-quarter basis in terms of admissions. There are segments like Hollywood films which have a depressed number in terms of quantity. Quality is fantastic, “Dr. Strange,” “Spiderman,” “Top Gun,” all of these films have exceeded the expectations, “Jurassic World.” But as far as the quantity goes, studios are still ramping up their production. Same is the case with Hindi films, producers are still ramping up their production. There has been a lot of disruption in terms of shooting over the last two years. We could have some surprises as we move forward but I think at an annual level, the entire financial year we are looking at a very strong set of numbers in terms of admissions."

Talking about the ad scene, PVR CEO Gautam Dutta said that in the second quarter the company should be getting its averages a lot better than the pre-Covid numbers of Q1 as compared to Q1 of last year. “So, currently we are in a gap of about 38 per cent, which should be reduced to about 20 per cent or so in Q2. By Q3, which is really a festive period and a lot of advertisers begin to advertise, we believe that we will be within the pre-Covid levels or maybe five or seven per cent lower. I am very certain that by Q4 we will end up sort of exceeding the pre-Covid numbers. So, that is going to be the trajectory, and having said that, yes, there has also been a big churn in the advertisers who used to come earlier to now.

“We are seeing a lot of traction with new age advertisers who have come in, some of the FMCG and the multinational brands are taking a little more time. We hope that by quarter three they would possibly be back at the cinemas, so that's largely what it is. Retail clients are showing a quicker turnaround, and we are seeing that while the RO size is small, they are kind of coming back to cinemas much faster. So, overall, I think quarter two is going to be a little under pressure but the average will get better than what we have achieved in Q1, but Q3 is really where I believe that we will be largely in the hitting range of pre-Covid numbers," Dutta added.