Why is PVR-INOX shutting down 50 screens? Is this the end of an era or a strategic leap into the future?
PVR and INOX – two major competitors, surprised everyone by joining forces and raised expectations of remarkable achievements after the merger. However, PVR-INOX unveiled their first financial results post-merger during the recent result season. Yes, the revenues were impressive, but the overall result turned out to be mediocre.
With the decline of blockbuster movies, the revenue source of PVR-INOX is also fading away. While it may experience some successful quarters ahead, the fate of this business is determined by the success of a movie.
In the recent turn of events, the company aims to shut down 50 screens. Let’s find out why?
What’s Happening?
PVR-INOX has made a surprising announcement regarding closing around 50 cinema screens within the next six months. These screens are either running at a loss or located in malls nearing the end of their life cycle and have little chance of revival. It’s a strategic move aimed at streamlining operations and focusing on more profitable ventures.
The last blockbuster film ‘Pathan’ performed exceptionally well in January, bringing a glimmer of hope. Unfortunately, the following months witnessed a lacklustre performance of Bollywodd films, which failed to create the same box office magic.
The company’s financial performance in the recent quarter has been a mixed bag. They reported a staggering loss of Rs 333 crore in the March 2023 quarter. Moreover, they recorded a profit of Rs 16.1 crore in the preceding December quarter, only to face a loss of Rs 105 crore in the same quarter of the previous year.
However, amidst these ups and downs, PVR-INOX managed to more than double its revenue from operations, raking in an impressive Rs 1,143 crore in the fourth quarter of the last financial year, compared to Rs 536 crore in the corresponding period of the previous year.
Reason Behind Closing Screens
The decision to close cinema screens is seen as a strategic move aimed at helping both PVR and INOX achieve their objectives. In the previous financial year, the companies successfully launched 168 new screens across 30 theatres, with plans to open an additional 150 to 175 screens in the upcoming financial year. These new screens are currently in various stages of fit-out.
According to Mint, after the PVR and INOX merger, PVR’s Joint Managing Director Sanjeev Kumar Bijli expressed a vision to expand the number of screens by 200 to 250 every year. It may extend to a 3,000 to 4,000 screens company in the next five years.
What’s Next?
PVR-INOX undoubtedly confronts numerous challenges. The effectiveness of their decision to close down screens remains to be seen, and only time will reveal its true impact.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information only. This is not investment advice.
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