Can PVR Inox script a turnaround?

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₹12.8 crore. This came amid December emerging as the highest grossing month of 2023, thanks to Bollywood superhit Animal, which grossed over ₹650 crore, while other notable releases included Salaar ( ₹480 crore), Dunki ( ₹270 crore) and Sam Bahadur ( ₹110 crore). However, Q4 did not have such box office successes.

The key Bollywood movies for the quarter included Fighter (gross box office collections or GBOC of around ₹260 crore), Shaitaan (~ ₹165 crore) and Article 370 (~ ₹90 crore). In the regional genre, Hanu-man (Telugu and Hindi versions) at ~ ₹165 crore and Manjummel Boys (Malayalam and Tamil) at ₹150 crore delivered relatively strong numbers. But Hollywood movies disappointed.

“We had highlighted that due to the strike by Hollywood writers and actors, film production had come to a halt in 2H2023 and that would hit availability of Hollywood content in 1H2024. We think this weak Hollywood content situation will continue in the June 2024 quarter too before improvement in 2H2024," Nirmal Bang added. Notably, PVR Inox has a much higher share (~50-70%) of Hollywood box office revenue in India compared to Bollywood (30-40%) and regional movies (10-25%).

While having quality movies is not in the company’s hands, it is taking multiple steps to spruce up its balance sheet and improve capital allocation. In an interaction with analysts from ICICI Securities, PVR Inox CFO Nitin Sood said the firm’s focus in the next 12-18 months will be on lifting the operational performance of the business. This will be done by shutting down non-performing screens, renegotiating rental contracts with landlords, reducing capex intensity and becoming free cash flow positive.