According to Chief Financial Officer, Nitin Sood, PVR Ltd. posted its first profit in two years as higher disposable income boosted consumer spending on food and beverages.
“When someone makes the decision to go out for the big screen experience, they go out of their way. They spend a lot more,” Sood told BQ Prime’s Niraj Shah.
This phenomenon helped the multiplex chain operator record average ticket price and per capita spending at its highest levels of Rs 250 and Rs 134, respectively, during the April-June period.
This was achieved despite occupancy rates below pre-pandemic levels at 33.6% versus 37.3% in Q1 FY20. Rising consumer spending also partially offset advertising revenue that was 32% below pre-pandemic levels.
“We are almost 90% of the pre-pandemic level in terms of recovering theater admissions,” Sood said. “It has recovered despite strong growth in ticket prices.”
The making of pan-Indian films will benefit occupancy rates, Sood said. “Producers and directors have realized that their market is not just North India or West India, it’s the whole country. The films will be scaled up.”
With the increase in disposable income in the country, Sood said the business will do extremely well over the next 12 months.
“We have stock market approvals,” Sood said of his merger with INOX Leisure Ltd. “We are in the process of filing the plan with the NCLT, which should happen within the next few weeks. It usually takes 5-6 months.”
Hopefully by the fourth quarter, the merger will be complete, he said.