food and beverage: PVR Inox looks to grow pre-ticketing F&B biz post its JV with Devyani

PVR Inox’s joint venture (JV) with Devyani International will help the company pivot from being a pure-play cinema exhibitor to also having a large role in the booming food and beverage (F&B) segment, a top company official said.

The multiplex operator recently inked a JV with Devyani International, which runs quick-service restaurants (QSRs) like KFC and Pizza Hut. Devyani will own 51% of the JV, with PVR holding the remaining 49% stake.

Speaking to analysts during the Q4 earnings call, PVR Inox executive director Sanjeev Bijli said the JV will allow the multiplex chain to grow its pre-ticketing F&B business.

Currently, it earns most of its F&B revenue post-ticketing, which is only when a consumer buys a movie ticket.

“We felt this partnership was a win-win one because we get to have some F&B revenues, which are pre-ticketed. We can get the opportunity to come up with some branded food courts,” Bijli said.

He noted that most shopping malls lack branded food courts, and PVR Inox, which attracted 150 million moviegoers in FY24, can add value in this area.The branded food courts are expected to help PVR increase its wallet share among existing consumers.In FY24, PVR Inox’s revenue from the sale of F&B jumped 21% to Rs 1958 crore, while F&B spend per head rose 11% to Rs 132.

PVR Inox will bring value to the JV in the form of negotiating better rental deals and locations with real estate developers. The food courts will be located adjacent to PVR Inox cinemas.

While declining to comment about the investments being made by the JV, PVR Inox CFO Nitin Sood said the initial plan was to open 5- 6 food courts. “We are still in the process of developing a long-term business plan.”

Bijli said the exit quarter of FY24 was soft due to the impact of the general elections on new movie releases and the underwhelming performance of Hindi films. In FY24, PVR Inox recorded the lowest quarterly collections of Rs 759 crore in Q4 due to box office volatility.

The company is expecting box office collections to improve post-elections due to a strong slate of Hindi and Hollywood movies.

PVR Inox is also transitioning to a capital-light model by reducing overall capex in FY25 by 25% from Rs 700 crore in FY24. The company is planning to install 120 screens at the gross level. The net screen addition is expected to be 50–60, as it is looking to phase out 60–70 screens.

The company is also adding screens through franchise-owned company- operated (FOCO) model under which the developer will make the entire investment in the cinema property while PVR Inox will generate revenue through management fee.

PVR Inox is looking to monetise real estate assets worth Rs 300–400 crore that it inherited from the Inox merger. The proceeds from the sale of real estate assets will be used to pay off debt.