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PVR to add 60 screens in FY18, hit 1,000 mark by FY22: Ajay Bijli

NEW DELHI: PVR, the largest domestic multiplex operator with 600 screens and nearly 22 per cent market share nationwide, expects to have 1,000 screens by FY21-22, adding 80-90 screens organically every year, Chairman Ajay Bijili told ETMarkets.com on the sidelines of Cineasia 2017 in Hong Kong.

The entertainment company said it might add another 60 screens in the second half of this financial year. The company will invest about Rs 200-250 crore annually going ahead.

PVR is always open to inorganic growth opportunities if they are a right fit, Bijli said. He said there was no such opportunity currently on the table.

The exhibitor, which already has two properties in Columbo, Sri Lanka, has also been exploring international foray, but is not chasing a 'me too' strategy as it believes focusing on already developed markets may not yield much results. The Sri Lankan screens will open in next 24 months, Bijli said.

PVR is focussed on growing Ebidta and ROI (return on investment) and would like to see qualitative growth in screen additions compared with many US-based entertainment companies, which in the past went only for screen additions.

India has about 9,000 screens at present compared China's 40,000. India has 3,000 multiplex screens, 70 per cent of which are owned by a few exhibitors such as PVR, Inox, Carnival Cinemas and Cinepolis. Leading exhibition companies globally such as Regal Entertainment and AMC own screens in a few thousands.

"India is grossly under-screened and has plenty of scope within the country, as 300-400 single screens are closing down on an annual basis. We have to increase screen count per property, given 900-1,000 movies release in India every year. There's a long way to go," Bijli said.

"At any point in time, about 120 screens are under fitouts. As of today, 140 screens can be opened anytime. At an average of Rs 2-2.25 crore per screen, we see Rs 160-170 crore investment on 80 screens every year. Adding technological upgrades, Rs 200-250 crore is what we intend to spend every year," Bijli said.

The exhibition company last week signed a deal with 4DX for additional 16 screens. It has also bought a minor 2.16 per cent stake in iPic, a US-based luxury theatre chain that has 121 screens. It bought DLF's DT Cinemas in 2016 and Cinemax in 2013.

PVR's peer Inox expects to take the screen count to 512 by FY18 end and another 515 thereafter. Mukta Arts plans to raise screen count to 68 by FY18 end and another 200-250 in the next three years.

Key multiplex players' aggression in screen additions would not only fuel competition but also invite the risk of not getting the desired occupancy, brokerage IIFL Wealth said in a note
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Having said that, the opportunity is huge in the form of abundant untapped markets. Multiplex screens at the right location could lead to substantial market gains, the brokerage said, adding that higher disposible income and rising discretionary spend would lead to higher occupency at multiplexes, it said.

There are concerns over the rise of substitutes such as Amazon Prime and Netflix, which realesed movies like 'Toilet-A Prem Katha' within weeks of its launch.

The company classified the early screening of 'Toilet-A Prem Katha' on TV as a special case and stated that the social message in the movie contributed to its early telecast on TV.

In a recent analyst call, PVR noted that there wad a large window of 60-plus days between theatrical exhibition and television exhibition of films and it does not expect it to come down as theatrical exhibition contributes 70 per cent to overall revenues of Indian film industry.

Brokerage Nirmal Bang Institutional Equities sees 5-6 per cent volume growth and 4-5 per cent rise in realisations for big multiplex operators in next 10 years. The brokerage expects 10-15 per cent PAT CAGR for the industry during the period.

The third quarter of this financial year has seen the release of movies such as Judwaa 2 and Golmaal Again, but Sanjay Bhansali's 'Padmavati' got delayed. Salman Khan starrer 'Tiger Zinda hai' will release this week.

(The reporter was hosted at Cineasia, Hong Kong, by PVR)

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