Cinemas to hit pre-covid levels in 2-3 qtrs: Bijli
3 min read 24 Apr 2023, 11:43 PM ISTBijli said that the cinema giant, looking at opening 200 new screens per year, will benefit from economies of scale on all fronts, including capital and operating spending.
PremiumMUMBAI : Cinemas in the South have bounced back to pre-covid levels in terms of footfalls and revenue, said Ajay Bijli, managing director of the merged PVR Inox Ltd, adding those in other parts of India will take 2-3 more quarters given the limited supply of movies after the pandemic.
He added that the cinema giant, looking at opening 200 new screens per year, will benefit from economies of scale on all fronts, including capital and operating spending. A new leadership structure, including executives from both sides, will also take charge. Incidentally, 50% of its new multiplex properties will come up in the South, which is still under-penetrated, Bijli said.
“Sanjeev (Bijli, joint managing director, PVR Ltd) and I are running the company, while Alok Tandon (former Inox CEO) is looking after west, central and east India as co-CEO, and Gautam Dutta (former PVR Group CEO) is looking after north and south India as co-CEO. Both will have more than 800-900 screens to look after, more than they were doing before the merger," Ajay Bijli said in an interview.
The company is running a 100-day programme called Parikrama, where it is working on line items, cost items and revenue items as a team to figure out synergies and the likely benefits for the merged entity.
Talent and leadership consulting firm Korn Ferry is helping on the human resources side and Boston Consulting Group with other management areas.
Bijli said there is no rationalization at the unit level because it is already very lean, with 23,000-odd people between the two companies.
“What this merged entity does is that it makes the balance sheet stronger and makes our screen capex better because now, we are able to make bigger orders to all our suppliers, like manufacturers of seats or carpets or projection systems. In terms of quantitative growth, the combined entity had already signed a big pipeline individually. So first, individually, we were growing by about 80 to 90 odd screens a year, now we will be doing 200 screens a year," Bijli said. Further, as it continues to look at standard 15-20 years of leases, out of 1700 screens, at least 20% will always require some renovation or upgradation, Bijli added.
PVR Inox runs 1,683 screens across 360 properties in 115 cities in India and parts of Sri Lanka.
Bijli explained that the company cannot blindly open multiplexes in areas where there already is enough capacity. “We are hunting for opportunities with developers for areas where there is no capacity. We do a gap analysis to find catchments and are opening there. At the same time, we go one step further to see if a mall or a shopping centre, or an organized retail format is coming up with a good developer. Because a lot of money gets invested, and there is no point just opening something which doesn’t stand the test of time," Bijli added. With cinemas having remained open only for about 12 months of the covid-induced shutdown, Bijli said there are signs of recovery.
“South has already picked up big time, both in terms of quantity of supply and consumption on the demand side, they have returned to the pre-covid level. Other regions like north, west and east are still taking their time. But I find the results very promising," Bijli said, naming The Kashmir Files, Gangubai Kathiawadi, Drishyam 2 and Pathaan as hits.
“Business should take a maximum of another two to three quarters to bounce back. It could happen earlier, but I am being conservative. This is a very temporary phase that we’re going through," Bijli said.