Ajay Bijli on India’s cinema boom and PVR INOX growth takes us inside the turnaround of India’s largest multiplex chain, as PVR INOX bets on movie theatres, small-town India, affordable cinema, and the future of the big screen experience.

In this episode of The Media Room by The Core, Vanita Kohli-Khandekar speaks with Ajay Bijli, Managing Director of PVR INOX, about how the company moved from losses to profit, why 150 million people walked into its cinemas, and what the numbers reveal about India’s changing entertainment economy.

Ajay Bijli explains why Indian audiences are returning to theatres, how better content variety and blockbuster films are driving box office growth, and why PVR INOX is now focusing on asset light cinemas, franchise models, low cost screens, Smart cinemas, Tier 2 and Tier 3 markets, lower ticket prices, and better return on capital.

The conversation also explores the bigger business story behind India’s film exhibition industry. Does India really have a screen shortage? Can smaller cities become the next growth engine for multiplexes? Are movie theatres still relevant in the age of OTT platforms and streaming? And what does PVR INOX’s turnaround tell us about consumer spending, urbanisation, real estate, entertainment, and India’s next phase of growth?

NOTE: This transcript is done by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

TRANSCRIPT

Vanita Kohli-Khandekar: Welcome to the media room. PDR INOX is India's largest theatrical company. It has over 1700 odd screens across the country.

It has had a great financial year 25-26. 6700 odd crore, 150 million people have walked in and its profit after tax has risen more than 5% after a loss last year. To understand better the nature of these results, what has driven it, what are the inherent changes in the film business which have driven this turnaround at PDR INOX?

I spoke to Ajay Bijli who is the managing director and the man most responsible. He's been the face of PDR INOX for the last 30 odd years. We also talked about where future growth is going to come from because they're investing in low-cost screens, in asset light screens and which will hopefully have lesser ticket prices etc called smart.

More on that with Ajay Bijli. Hello, Mr. Bijli. Welcome to the media room.

Wonderful to have you. I think this is the second time we're doing a video conversation. The last one was for Film Companion.

PDR INOX has had a great year. The results are looking very good. You want to take us through what has brought about this change?

What are the results?

Ajay Bijli: I think the most important thing is the market in which we are operating is phenomenal. The quantity of movies that came and the quality of movies was fantastic. And of course, once again the consumers gave their verdict that they want to have the big screen experience.

What I liked about last year was also that there was a lot of variety of movies. Durandar is something which was very big. I hope it happens more often, but once in a while only a movie comes like that.

Also credit to them that they released both the sequels in one year. Although the second sequel came only towards the fag end of the financial year. But I think movies played a very big role and the consumer's appetite to go out played a very big role.

Also, PDR INOX is not a passive brand. Otherwise, it's very easy to say that the macro environment was so good that automatically the results came. So I think that way we will not be doing justice to what the company has been doing, what the team has been doing.

So all those factors of making sure that our locations are in the right place. All those factors that give very high quality experience, both physical as well as softer skills, which is your customer service, the F&B offerings, the design, the wow factor of our cinemas, being in the right place and making sure our pricing, our programming, our scheduling. These are the things that people don't see.

That gives PVRA a delta over any other cinema operator in India, which is the reason why we get the highest number of footfalls per screen, actually, globally. That's also part of our present. Globally, the number of people who come to PVRA cinemas per screen is the highest in the world.

And that is because of not just being a spectator and observer to movies coming and people coming. It is also proactively going out there and marketing films, marketing various things like we have the 99 rupee offer, we have moviecation, we have so many offers that we do slice and dice the demographics. I think all that has paid off in getting 150 million visitations to our cinemas, getting the kind of ATP growth and the SPH growth we got.

That's one part of it. And the other reason is that, as I was telling you, that sweating the brand, just sweating the asset. So sweating the asset is, OK, make sure that per square foot that we dedicate to the cinemas is optimal, the right amount of scenes, the right amount of food offerings and any other activity.

But that is something that we've been doing for a very long time. But this time we said the brand is known in all humility in the country. Why don't we sweat the brand and see what other retailers have done or hotel companies have done or QSRs have done.

The franchise, can we franchise out our cinemas and see, you know, Tanishq, Titan, so many people. We did a lot of, I met a lot of chief executives of these great companies and understood that if what they've achieved, can this be achieved in cinemas as well. And we were the first company in the world, a cinema company to start at the franchise.

And that brought the sweating of the brand and that brought, didn't compromise on our screen growth, but it did bring our CapEx intensity down. Similarly, we did the asset light model where we convinced some of the top developers in this country to contribute. Normally, you have a normal SLSC schedule without getting technical, but only some leasehold improvements, the developers, you know, walls in the auditorium, maybe some sanitary fixtures and stuff like that.

But this time we requested them to invest even beyond a normal thing, the flooring, full toilets, all that. So almost 70% of contribution of CapEx came from the developers that again brought our capital intensity down and improved our ROCE. So all these come straight to the bottom line.

And so I was very focused on getting a double digit ROC. So from a negative ROC or a single digit ROCE, we've come to a 0.2% positive ROCE. So that's again been a big game changer.

Of course, that has helped us in our bringing our debt down when literally negligible in our net debt levels now. And so I think from a balance sheet perspective as well, I think we've been able to make the company much stronger. And now it's all gravy from here on because the content pipeline is good.

A lot of cinemas are coming up in tier three places as well. It's not the big metros, Bombay, Bangalore, you know, Noida, Gurgaon, Hyderabad, but even in smaller towns, these small mini malls, you can say 50,000 to 100,000 square feet, which are coming up. And we are sticking our cinemas there as well.

Vanita Kohli-Khandekar: What is the, I mean, franchise owned company operated and the asset light. I mean, what of, I think you're 1,750 odd screens, if I'm not mistaken, totally. Asset light, capital, CapEx, how much, what do they bring into your top line?

Any analysis on that? Just curious. I mean, has that really helped in terms of growth and scaling up?

Ajay Bijli: Early days, but they come straight to the bottom line. But it's early days of, as I said, the difference has come in the ROCE. The difference has come in the EBITDA.

Yeah. So that's where.

Vanita Kohli-Khandekar: And you're also doing this low cost, low ticket thingy, which you mentioned that you're starting the first screen in July in Muzaffarpur. Can you take my viewers through the logic on that one, please?

Ajay Bijli: You know, for the long time, you and I have been discussing this pin code, postcode thing that there are so many. So we've done our own analysis because in certain arrangements, there are postcode change every three kilometres. You can't have a cinema every three kilometres.

So therefore we said, okay, let's zoom out a little bit. There is a lot of chatting happening about this postcode, but we'll do our own analysis. So we've realised that there are several pockets in India, several pockets where you don't have a good quality cinema experience.

And that can also be in big cities. Like for example, in Jaipur, we've identified pockets where the nearest good cinema, good quality cinema is seven kilometres from the catchment that we have found. And there's enough demographics over there to get this cinema.

So smart cinema is anything between three to four screen complex, no compromise on room seat width, but very efficiently built. So per square foot per seat is also less. The ATP, the price will be 30 to 35% lower than the mainstream cinema.

The menu choices will be limited in terms of F&B. So there also, of course there'll be some acclimatising that we will do, that if you're in a Bihar, what is the local flavours that work there? If you're in Gujarat, what should it be?

If it's in South, that acclimatising that we do in our offering will happen. But the price points of popcorn, Pepsi, all other things will be very, which will be about at least 50% lower than our point in our normal cinemas. And I think this is a growth area, tier three, tier four, when you talk about, if you go by the definition, then you're talking about a hundred thousand people.

I think that, that I think is a bit too less to put up a three to four screen complex. So at least three and a half lakh to five lakh people, you still need in a city for us. So that's why we are doing our own.

Vanita Kohli-Khandekar: I wanted to know, what are the variables in that box when you decide to do a smart screen in a particular city or town?

Ajay Bijli: I think three and a half to four lakh people will be there. And that's on the first level. Then you go deeper into it.

Of course, their average income, their habits of going out, then you have to slice and dice it even further, because let's not forget whether it's Foco, which is done by a developer, whether it's Assetlight or whether PTR is putting his own money. We want all stakeholders to make money. It still has to be a viable product.

If it is not viable, then it doesn't matter. It doesn't make sense. So I think we have to go very deep into movie going habits, age profile, their habits of how much they're willing to spend on tickets, on popcorn, Pepsi, number of visitations that they can make in the year.

So there's a whole method to the madness before we look at the, sometimes there's competitive intensity there already. Sometimes you'll find that we're doing a cinema in Rampur, for example. That's also in UP.

So Rampur. And there already there are two, three players, five or six kilometres from us. So you get some indications from them also, what kind of ATP they're charging.

And so you get, so we need to be very careful that this is shareholders' money. Even if we, we can't plonk the cinema just anywhere, just because three are three. So educated sort of analysis is done.

But this is more or less, the criteria of going into these smaller towns.

Vanita Kohli-Khandekar: But do you do this state-wise or is it an exercise which involves all of India? Do you look at each state separately?

Ajay Bijli: No, all of India. So we have a development team all over the country. And we also have cinemas in 113 cities now.

So a lot of information also comes from our people who are there. Like Calcutta, outside of Calcutta is Barakpur. So Barakpur is also maybe doing the smart cinema.

So this information came from our West Bengal RN. He said, by the way, sir, there's another catchment where I think maybe PVR may not work at those prices. But if you do a little, you know, watered down version, it's not watered down, it's still a great cinema.

But if you do a smart cinema, it'll work. So I think just now it's serendipity. Wherever we get an opportunity, we go.

Because we have the infrastructure. So we're not saying that it has to be UP, it has to be Bihar, it has to be Punjab. Wherever there's an opportunity, we'll go.

Because now we have that bandwidth to go wherever we feel like within the country.

Vanita Kohli-Khandekar: You know, you and I have had a disagreement on whether India really has a screen crunch or no. Does India have a screen? Because every time we talk about these 8 or 9,000 screens that we have, do we have a screen crunch?

It's not that PVR is responsible for a screen, you are investing in building screens. But is there a screen crunch and would more screens help scale the market?

Ajay Bijli: No, I don't have a disagreement with you at all. I have, the numbers that are being talked about, I feel are too much. So I keep giving that hackneyed example that the 5,000 single screens which are there is 5,000 seat capacity, roughly, single screens.

So when we compare to China multiplexes, those 250 seats each screen. So if you were to divide this 5,000 by 4, these are 20,000 screens already. Because these are big screens.

So according to me, the underscreening, also by the way, China and US had over screened. The growth was more than what the market could take. That's why they had a problem.

So if the current number is say 8,500 or 9,000 screens, I'm not saying the number is 40,000, we need 30,000 more. I'm saying 25,000. India can take 25,000.

So we are underscreen to the extent of 15,000 screens more. That I definitely agree. But when the numbers of postcode driven numbers come, when numbers come comparing ourselves to China and US, those numbers I don't necessarily agree with.

So obviously running a company, I have to look at the market and that's why we're growing by 100 screens every year. So the last year we had 100 screens. I'm talking about gross, not net.

And this year again, we're on track for 100. And with this tier 4 strategy, tier 3 strategy, I think this number can go to 150, 200 next year. Definitely.

I mean, we just signed in Himachal. We never had anything in Himachal. So we're looking at all pockets, like you went to Leh.

Vanita Kohli-Khandekar: I was so delighted to see a PVR there.

Ajay Bijli: So many virgin territories like that. India is so big that you can open up.

Vanita Kohli-Khandekar: I don't know if you know, but I was reading this book, which looks at the global footprint of Indian cinema. And one of the things everybody tells me, Jyoti Deshpande said, we have to be big inside our own country first, before we even attempt to do big global releases. You have to be big.

And we've not achieved the scale which this country is capable of in terms of... So Duryodhana is one example with 9,000 screens. But imagine if India was adequately screened, even at 12, 15, 20,000 screens, what numbers we could have?

If we are not a 5, 10 billion dollar industry, then our capability... So when you talk about scale for PVR, you look at only the India market. None of the markets outside of India are the ones with cultural affinity interest you or would that interest you?

I'm just curious. I always wondered about this one. You had Sri Lanka, you had some screens, right?

Ajay Bijli: Sri Lanka was almost an extension of our South strategy. And one of the developers who we already had a relationship with was opening a mall. And we went over there and it was a phenomenon.

So a lot of Tamil, Telugu, Malayalam, Kannada, English movies, they do very well there. But other than that, we don't have the aspiration because Indian market is so unique. Where in the world you get 1,500, 1,600 films a year?

Where in the world you get whatever the number of people who come to visit cinemas? This number is not there anywhere. So the reason why the box office growth, which is now bound to happen, I think, definitely is lower than the world because our ATP is still very low.

People still crib about ticket prices, but it's only 280 rupees. Even PVR, let's say, is considered to be the most premium circuit, if I can say it myself. Even our ATP is 280 rupees.

So what is 280 rupees? It's not even to globally look at where the ticket prices are. But if you look at the whole country, even the balcony prices are at 100 and 120 rupees now.

So per capita, 100 rupees, this is not a very high ticket price. 120 rupees. Therefore, you're talking about how will the box office grow?

Box office can only grow with value and volume. Isn't it? So if you keep cribbing about value, then it's not going to grow.

I'm saying that there is no correlation. At least we have seen various experiments we've done with slicing ticket prices. It doesn't increase the volume because people are very sensitive about the content and the three hours that they want to spend outside.

So we've done this 99 rupee experiment with great movies playing. Then, of course, there's an upsurge. We've also done a 99 rupee experiment when the content is not something which people are wanting to see.

Nothing happens to the occupants. They remain flat only because people are also very time sensitive. So my point is that consistency of content is very important.

Now it is getting better and better, which is the reason why last year, Durandar was the two films only, big ones. And as I said, only the fag end, Durandar 2. There were lots of movies that came.

So the more content consistency is there, then, of course, box office is bound to, and spectacle movies as well. You have to have big movies, you have to have small movies, all sorts of films have to come. And of course, screen count also has to increase.

So there's no one silver bullet, that only screen count will make it happen. It's a number of factors.

Vanita Kohli-Khandekar: But this whole debate about people are not going to see movies is over as far as this particular fact. I don't see that.

Ajay Bijli: Data is only showing that. Data is only proving that people are coming and watching movies. It's still an incredibly inexpensive form of three hours of entertainment, going out and watching a movie on the big screen, as compared to so many other activities like travel, you know, eating out, so many other options.

But this is still a very, even concerts out of home entertainment. Just look at the concert tickets for heaven's sake. How much are they?

So expensive. And honestly, the quality of our cinemas, if you don't mind, I mean, if I can say it myself, there's no compromise on seating, legroom, quality of the projection system, all laser, Atmos sound, there's no compromise at all. Because Indian consumer does want, if he goes out, and he says, I want the best, you know, so we make it affordable, at the same time aspirational.

So that is the positioning, at least we have thought, how do we make it aspirational? I can't let the aspirational thing down as well. Because the moment I start compromising, even our smart cinemas, by the way, are very, very, I was about to say smart is aspirational, because smart is supposed to be the, Come to Muzaffarpur on the 17th of July.

Vanita Kohli-Khandekar: I will. What that experience is like. Okay, last question.

I know you have a hard stop. Is, you know, we talked about volume and value growing. But going by different sources of data, and ticket sales actually fell last year, marginally, but they did fall.

But PVR has had a good year, you said 150 million tickets sold, etc. So is PVR a better metric to look at what is happening? Or is, you know, this is I'm just quoting Ormax data.

Ajay Bijli: Yeah, as I said, there are people, very expert people in my company, Kamal Ganchandani, for example. He feels that this time this Ormax data is something which is not maybe capturing the correct number. I have respect for them a lot.

They do a great job. But I think because normally PVR's results, PVR is not an outlier, but PVR's results definitely if extrapolated, can be extrapolated on the entire country. So if the overall box office of the country has gone up by 8% to 13 and a half thousand crores or something, I think 13 and a half thousand crores.

Vanita Kohli-Khandekar: Yeah, it is.

Ajay Bijli: 80p is where it is. It's a very simple maths. No more number of people have come to the cinemas.

So similarly, in our case, also, there is a simple mathematics to prove more people have gone compared to last year, because the last year was 11,000. This 2,000 crores growth that has happened this year is not value driven. It is volume driven.

It is not possible. There is no question that this 2,000 will come only from value. There were not even so many blockbusters.

One can argue, okay, there are so many blockbusters, that's why. How many blockbusters were there? Only two movies did more than 500 crores.

Vanita Kohli-Khandekar:

Kantara and Dhurandhar.

Ajay Bijli: So basically this time, 20% of the movies, sorry, there was 20% increase in the 100 to 200 crore bracket.

Vanita Kohli-Khandekar: Yeah, the middle was.

Ajay Bijli: Yeah, and 19% were between 200 and 500. Sorry, 19% were above 500 amongst the total. Just have a look at page 5.

Vanita Kohli-Khandekar:But the diversity and the spread has improved, at least in the last year, year and a half, one can see that.

Ajay Bijli: The point I was trying to make was, in the blockbusters, there is some upsurge that happens in ticket prices. But if the blockbusters are only less, that means the volume that is driven.

Vanita Kohli-Khandekar: Very interesting.

Ajay Bijli: Yeah, so volume has driven.

Vanita Kohli-Khandekar: Point taken. Super. Any forward looking thing which you can talk to us about, especially, so smart is happening, anything else happening in this year, which you can talk to us about?

Ajay Bijli: Smart is, I think, a big growth engine for us.

Vanita Kohli-Khandekar: How many smarts are we looking at, by the way? How many smarts are we looking at?

Ajay Bijli: Currently, about 25. As I said, I'm very careful about where to open and want every project to be viable. But going forward, this number will go to 50, 100, 150, 200, definitely.

It's a very important growth engine. Rest is all just innovation. Within the cinemas, we'll keep improving the quality of our experience.

Some things I like to keep up my sleeve till they're actually done.

Vanita Kohli-Khandekar: Thank you so much for talking to us, Mr. Bijli. Thank you for your time.

Ajay Bijli: Thanks a lot. Best of luck.