PVR Inox’s Food & Beverages Business May Soon Eclipse Movie Tickets Business

The skyrocketing revenue of PVR Inox from food & beverages business is fast establishing it as one of the leading F&B players in India. As compared to the 19% YoY growth recorded in revenue generated from movie ticket sales, the food and beverages (F&B) business grew 21% in FY'24.

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If you think that movie ticket sales are driving the growth of PVR Inox in India, then it’s time to pay close attention to the latest financial figures of India’s top multiplex.

According to PVR Inox’s annual filing for FY’24, its Foods & Beverages (F&B) unit is growing faster than the movie ticket business. As compared to the 19% YoY growth recorded in revenue generated from movie ticket sales, the food and beverages (F&B) business grew 21% in FY’24, ending March 30, 2024.

PVR Inox’s revenue from F&B increased to Rs. 1,984 Cr. from Rs 1,618 Cr in the previous fiscal year. However, the movie ticket business still remains the biggest revenue arm for the company despite the lukewarm response of Box Office. In FY24, PVR Inox’s revenue from movie tickets grew 19% to Rs 3,915 crore from Rs 3,295.2 crore in FY23.

The company clarified that the severe volatility observed in box-office collection kept the revenue figure lower than expected.

One of the primary reasons behind the soaring revenue from F&B at PVR Inox is the tweaked business model. At many places in meteors and non-metros PVR Inox now allows people to buy and consume food without mandating that they buy movie tickets. The model has helped the the multiplex to overcome from the financial struggle that it has been observing since the covid era.

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The company is also experimenting with the delivery of food & beverages, albeit in selective markets, in a bid to strengthen its overall revenue streams.

Lately the company has been focusing on having exclusive F&B outlets available only for PVR Inox customers. This the attracting many mall visitors who dont wih to satisfy their taste buds without having any intention of buying movie tickets. The strtegic partnership with Devyani Internatioal, one of India’s largest operators of chain quick-service restaurants (QSRs), is being seen a move to strenthen PVR Inox F&B business in the market.

As F&B has become the second biggest contributor to PVR Inbox’s revenue books, the focused approach on F&B business arm is giving many other QSR (Quick Service Restaurants) chains a run for their money.

With close to Rs 2,000 in revenue from F&B arm, PVR Inox has emerged as one of the strongest and closest competitor of Westlife Foodworld, the company operating McDonald’s restaurants across West and South India. In FY24 Westlife reported a consolidated income of Rs 2,410.28 crore, just 15% more from the F&B business of PVR Inox.

Interestingly, PVR Inox has become the sixth-largest food company in India. The F&B market is currently dominated by Jubilant Food Works – popularly known for operating 1,928 Domino’s stores and 25 Dunkin’ restaurants – which reported a revenue of Rs 4,010 crore in the first nine months of FY24. It is followed by Devyani International, Westlife Foodworld, Sapphire Foods India and Restuarant Brands Asia.

In addition to operating the largest franchisee for Yum brands, including KFC and Pizza Hut, Devyani International is also the sole franchise for Costa Coffee brands and cafes in India.

Sapphire Foods India, the 4th largest QSR chain in India, operates many stores of KFC, Pizza Hut and Taco Bell branded restaurants.

In partnership with Devyani International, PVR Inox is willing to challenge Jubilant Food Works’ dominance in India. The company is leaving no stone unturned to make the most of the captive movie audience by introducing discount offers on pre-booking food and beverages via apps and serving-at-seat options.

Most companies have started realising that the only way forward to stay on the growth trajectory is to leverage their existing customer base or captive audience. As a result, companies are now actively employing the horizontal scaling strategy, which allows you to add more product/feature options to your offering. The increasing contribution coming from F&B unit to PVR Inox’s overall revenue is a testament of the fact.

PVR Inox is now looking to pivot from just being a multiplex to leading F&B player by accounting for a sizeable share of yearly F&B market in India. In FY24, the collective revenue of top 5 QSR chains in India reached over Rs. 17,000 crore and PVR Inox is looking to grab a big chunk of that pie.

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