During the current financial year Inox added 68 screens across 14 properties.
Multiplex chain Inox Leisure witnessed a strong third quarter in FY19, with a 33 percent growth in revenue from operations at Rs 433 crore.
Speaking to Moneycontrol, Alok Tandon, CEO, Inox Leisure, said, “Spend per head has increased (year-on-year) YoY from Q3 by nearly 6 percent to Rs 74 per head. Advertisement revenue is also another major stream and we have had the highest ad revenue growth in the industry in the last seven quarters.”
Advertising revenue surged to Rs 55.9 crore YoY, a 38 percent jump from the previous quarter that was fueled by a higher per screen realization. Tandon also said that the company's nine-month revenue for advertising stood at Rs 133.5 crore.
Listing the reasons for the growth, Tandon said,“We have targeted new clients, created new concepts and solutions for media planners, and we have also used the multiplex's real estate, like the lobby, for a more impactful visibility of our clients’ products.”
Along with advertising, food and beverages (F&B) is an important component for Inox. The company's F&B revenue grew 45 percent YoY to Rs 106 crore on the back of an increased footfall, and the benefits from the lowering of goods and services tax (GST) levied on food and beverages served in multiplexes from 18 percent to 5 percent.
Brokerage firm Elara Capital pointed out that the spend per head (SPH) growth was despite the discounts and promotions offered even after the public interest litigation (PIL) filed in the Bombay High Court (HC) that challenged the current practice of multiplexes prohibiting customers bringing in and consuming food and beverages from outside sources within their properties.
Inox has introduced an interactive self-help kiosk in the lobby and it has also got a food icon embedded in its app which lets guests to order food from wherever they are standing.
In terms of content, Tandon said, “We have had a strong quarter where the movies have done exceptionally well. We had some good movies like 2.0, Simmba, Thugs of Hindostan which had great numbers coming in for Inox. Baadhai Ho, Andhahdhun,Kedarnath, Zero, Baazaar, Venom, Sui Dhaaga also contributed to a nice quarter, leading to an increase in footfall.”
He added that today’s audiences have become discerning, and want a good story. “For us Indians, what’s important now is that the content should be good, and we have seen it improving in the last two-three years.”
For Inox, the top 5 films in Q3 FY19 accounted for about 45 percent of gross box office collection (GBOC), compared to 52 percent in the corresponding quarter last year. This showed an increasing dependence on small and medium budget movies for generating footfall.
“Aside from the top 5 movies, 2.0, Baadhai Ho, Thugs of Hindostan, and other movies like Sui Dhaaga, Sarkar, KGF, Venom did very well and that’s a good sign that there are other movies as well contributing to other collections.”
Tandon also said that films like Uri, Thackeray and Manikarnika: The Queen of Jhansi have done well in January, with the content pipeline for FY20 looking exciting. “We are looking forward to screen Alita: Battle Angel, Gully Boy, Total Dhamaal, Kesari and Captain Marvel,” said Tandon.
Inox’s net box office revenue grew 29 percent YoY to Rs 243 crore, led by a footfall growth of 25 percent YoY. According to Elara Capital, this was despite the negative impact of BookMyShow's (BMS) deal renewal with rival PVR for the booking and selling its ticketing inventory through web and app based platforms for three years.
For Inox, the average ticket price (ATP) grew 3.6 percent YoY to Rs 206. This was on the lower side over the lackluster performance of big-ticket films commanding a premium ATP.
In terms of occupancy, the rate improved 300 bps (basis points) to 27 percent in the third quarter. The company recorded a 31 prercent growth in occupancy, its highest since Q1 FY18, during which Baahubali-2 had released.
In the third quarter, the company added 17 screens across 3 properties. “In January alone we have added 2 properties with 11 screens and for the remaining quarter, our endeavor is to add two more properties with 13 screens and close the year with 81 screen count. Today we already have 557 screens in 67 cities in 136 multiplexes,” said Tandon.
During the current financial year Inox added 68 screens across 14 properties. In comparison, PVR added 33 screens and has a network of 748 screens.
The government’s cut GST rates from 28 percent to 18 percent on movie tickets priced above Rs 100, and from 18 percent to 12 percent on movie tickets priced below Rs 100 has also proved beneficial for the companu.
“We at Inox have passed on the entire benefit of the tax reduction to our customers and this will surely help in increasing the box office sales as more people will come to theatres. This is a very positive sign and will add to the entire industry growing in India,”Tandon said.
Elara Capital has a positive outlook for Inox Leisure and expects box office collections to remain strong in the fourth quarter, as they would be driven by the latest successful tiles like Uri and Simmba, and the release of big movies like Gully Boy, Total Dhamaal and Kesari.
The brokerage firm also noted that Inox has the potential to grow further over better realizations on an improved brand image and consistent execution.
Stocks of Inox Leisure appreciated 10.99 percent in the third quarter of FY19.
