When your company’s success hinges on the fortunes of the film industry, the ups and downs can be quite pronounced. PVR Inox, India’s largest multiplex chain, recently revealed its financial results for Q2 FY25, the three months ending September 30, 2024. The figures are no less than shocking, showing a considerable decline in performance, sparking concern among investors.
PVR Inox’s revenue from operations declined a notable 18.9% YoY to ₹1,622 crore during the second quarter of fiscal 2025.
What’s even more surprising is that PVR Inox incurred a net loss of ₹12 crore in Q2 FY25, a sharp contrast to the ₹166 crore profit recorded during the same quarter a year ago.
However, it’s not all doom and gloom. On a quarterly basis, PVR Inox’s performance improved, with revenue growing an impressive 36.2% QoQ and net losses declining a whopping 93.3%. Even though these improvements are promising, a massive ₹191 crore net loss recorded in the first half of the ongoing fiscal 2025 remains a major concern that cannot be overlooked.
Let’s examine the factors contributing to PVR Inox’s revenue decline in Q2 FY25.
The Bigger Picture: Box Office Struggles
A whopping 97% of PVR Inox’s revenue comes from the movie exhibition business. However, due to disappointing box office performance, revenue from this segment fell 19.8% YoY in Q2 FY25, to ₹1,579 crore. It’s important to highlight that a significant portion of this revenue is generated from food and beverage (F&B) sales. Therefore, even if a large number of people buy tickets to watch movies at PVR Inox but do not spend on popcorn and drinks, it can severely dent the bottom line.
On a brighter note, PVR Inox’s revenue from movie production and distribution skyrocketed 77% YoY, amounting to ₹108 crore during the same period. This diversification highlights PVR’s strategic efforts to enhance its revenue streams beyond traditional box office earnings.
It is important to note that analysts had already anticipated a 23.2% YoY drop in PVR Inox’s revenue for the September quarter, driven largely by an estimated 19.7% YoY drop in overall box office performance. This dip was expected given that only four movies, Stree 2, The Greatest of All Time (GOAT), Devara (Part 1), and Deadpool & Wolverine, surpassed the ₹100 crore mark at the box office.
The challenge of matching the remarkable box office benchmark set in Q2 FY24 – which saw an unprecedented surge in audiences returning to cinema halls following the long-awaited easing of COVID-19 restrictions – further compounded the situation. The enthusiastic return of moviegoers last year created high expectations for subsequent quarters, making the current performance all the more striking.
Besides, the rise of OTT platforms has significantly influenced consumer viewing habits, contributing to declining revenues for both PVR and other multiplex chains.
Many people in India now prefer to wait for films to debut on streaming services like Netflix and Amazon Prime, choosing to visit cinema halls only when a movie justifies the ticket price, which can range from ₹230 to ₹750 or even more, depending on the type of film, whether it’s in 2D or 3D, and overall ticket demand.
The absence of movies led by Bollywood’s biggest stars – Shahrukh Khan, Salman Khan, Amir Khan, and Ranbir Kapoor – during the quarter was another reason for the below-par Box office collection. These four actors enjoy the most loyal and massive fan following, which keeps the ticket windows flooded.
Strategic Initiatives
Despite PVR Inox’s 19% YoY decline in revenue during the September quarter of fiscal 2025, the situation isn’t as dire as it may seem. The company’s strategic decision to re-release classic films like Tumbbad, Laila Majnu, Rehnaa Hai Terre Dil Mein, and Veer Zaara during quieter periods proved to be a successful move.
Interestingly, these re-releases of Hindi movies by PVR Inox accounted for approximately 6% of the September quarter’s admissions, indicating a growing demand for nostalgic content among moviegoers.
PVR Inox witnessed a massive turnout on National Cinema Day, celebrated on September 20, when over 1 million guests visited its theatres. This event, held in collaboration with 11 multiplex chains across India, highlighted the enduring love that Indians have for the big-screen experience.
Despite the challenges, PVR Inox remains committed to improving its financial performance. The company has reduced its net debt by ₹1,409 million in the first half of FY25, indicating its efforts to strengthen its financial position. As the film industry continues to evolve, PVR Inox must adapt its strategies to navigate the changing landscape and ensure long-term sustainability.
