PVR Inox Eyes Better Margins In Second Half Of FY25 On Back Of Big Releases

PVR Inox Ltd. is poised to witness significant improvements in its margins in the second half of the current financial year, according to the company’s Vice President of finance and investor relations Saurabh Pant.

He told NDTV Profit that he was hopeful of a better performance in H2 of FY25 on the back of scheduled releases of big films.

PVR Inox has reported a net loss of Rs 11.8 crore in Q2 versus a profit of Rs 166 crore in the same quarter last year. Ebitda margins fell to 29.5% versus 35.3% on a year-on-year basis.

The company’s revenue was down 18.9% at Rs 1,622 crore versus Rs 2,000 crore YoY.

“Ours is a high operating leverage business. We have a huge lineup of tent-poles in the second half right up to Q4. As the revenue picks up, the operating leverage also kicks in, and therefore you will see a significant improvement in margins going forward,” he said.

The company’s Executive Director Sanjeev Bijli agreed with the opinion and said that average ticket prices will also grow in the next two quarters.

“The first half was slow because Q1 was devoid of any films due to elections and IPL. Therefore, the ticket prices were low. In Q2, there were only two or three major blockbusters," he said, adding, "We also ran National Cinema Day with a discounted ticket price of Rs 99.”

Bijli said that the weak Q2 results were primarily due to a lack of blockbuster films unlike last year, which saw the release of movies like Jawaan and Gadar 2 during this period.

“Going forward, the lineup is looking very strong and we are very optimistic,” he said.

Bijli is banking on movies like Venom 3, Singham Again, and Bhool Bhulaiya to lead the box office in the second half of the financial year.

Commenting on the Rs 3-crore tax outflow in Q2FY25 compared to the Rs 66-crore benefit on taxation in the year-ago period, Pant said that the expenditure in the profit and loss statement was not actually a tax outgo.

“We have absorbed depreciation and carry forward losses for the past two or three years since the pandemic. From the cashflow point of view, it does not have an impact and is only a PNL entry,” the top executive added.

Shares of PVR Inox Ltd. closed 1.64% higher at Rs 1,616.15 apiece on the NSE against benchmark Nifty's decline of 0.28% on Tuesday.