PVR INOX to Monetise Real Estate Assets and Shift to FOCO Model for Growth

PVR INOX to Monetise Real Estate Assets and Shift to FOCO Model for Growth

PVR INOX to Monetise Real Estate Assets and Shift to FOCO Model for Growth

Leading multiplex operator PVR INOX has announced plans to monetise non-core real estate assets in prime locations such as Mumbai, Pune, and Vadodara, as it transitions to a more capital-light growth strategy. According to its latest annual report, the company will close 60-70 underperforming screens in FY25 while adding 120 new screens, focusing on profitable growth.

Key Strategic Moves

To reduce capital expenditure on new screen additions by 25-30%, PVR INOX will partner with developers, shifting to a Franchise-Owned, Company-Operated (FOCO) model. This approach will allow the company to share capex for new screens while still operating them. PVR INOX is also exploring the monetisation of owned real estate assets to become a "net-debt free" company in the foreseeable future.

Expansion in South India

As part of its long-term strategy, PVR INOX aims to focus on expanding its presence in South India, which has a high demand for films but fewer multiplexes compared to other regions. Around 40% of its new screen additions will be in this underpenetrated market.

Profit-Driven Growth

In FY24, PVR INOX opened 130 new screens but also closed 85 underperforming ones as part of its ongoing portfolio optimization efforts. This rationalisation aligns with its goal to enhance profitability by exiting non-performing assets. Despite reduced capital expenditure, the company remains committed to growth, planning to open 110-120 new screens in FY25.

Financial Performance

In FY24, PVR INOX reported revenue of Rs 6,203.7 crore and a loss of Rs 114.3 crore, marking the first full year of operations for the merged entity. The company reduced its net debt by Rs 136.4 crore to Rs 1,294 crore.

During the year, PVR INOX saw ticket prices grow by 10% and food and beverage (F&B) spending per head rise by 11%, driven largely by synergies from the PVR-INOX merger. Looking ahead, the company expects more moderate growth in ticket prices and F&B spending, in line with historical trends.

Future Focus

PVR INOX aims to restore pre-pandemic operating margins by enhancing return on capital and generating free cash flow. The company is also focusing on driving customer footfalls through innovative acquisition and retention strategies while reducing costs through renegotiated rental contracts and leaner organisational structures.

With a renewed focus on profitability and expansion in high-demand regions, PVR INOX is positioning itself for sustained growth while maintaining a firm commitment to operational efficiency.

About the author
Sandeep Sadh

About Sandeep Sadh

Sandeep Sadh has been in the real estate business since 1993 in Mumbai. He has expertise in Buying, Selling, Leasing properties in Mumbai and a deep understanding of legal and tax related matters due to his experience.

Summary

Over the years, he has experienced the City's growth. He has been a columnist in the Times of India with numerous articles, which bring about a clear picture of the real estate market in Mumbai. He is a regular on NDTV, CNBC, ET Now Real Estate and Zee News, giving his experienced quotes as and when required.

Sandeep Sadh has used information and technology since the year 1998 and now what people call it Prop Tech to cater to the needs of Home Buyer, Seller, Investor and Corporates, HNI and NRI looking to Buy/Sell or Lease their properties in the Mumbai Property Market.

Sandeep has a holistic experience of real estate be it Leasing an Apartment for your CEO in the most upmarket buildings, to enter into a long lease for your office in Mumbai in prime buildings or an Investment in good projects with a detailed analysis keeping in mind the Demand and Supply and other micro factors of the project/property.

Sandeep Sadh has developed a few websites like www.mumbaipropertyexchange.com, www.realestatemumbai.com, www.propi.in which augment the real estate consulting business.

Right from Investments in Primary Markets to Selling, leasing and specializing for NRI’s all over the world. He is an expert in NRI Home Buying and Selling and has a good understanding of the Income Tax laws pertaining to Selling a Property and Repatriating funds overseas or reinvesting based on Capital Gains etc.

Experience

  • Residential Leasing
  • Commercial Leasing
  • Residential Home Buying
  • Commercial Property Buying
  • Investment Properties with complete Property Management as your Real Estate Family office

While transacting in the above segments, he has complete experience and deep understanding of the paper work, his areas of expertise are :

  1. Drafting of the Leave and License Agreements
  2. MOU for Buying/Selling Properties
  3. Drafting Agreement for Sale
  4. Gift Deeds
  5. Computing of Capital Gains with current ready reckoner values
  6. Drafting of Supporting Power of Attorney.

As an add on Service, Sandeep Sadh has tied up with various Professionals like Lawyers and Chartered Accountants who add value in transacting and specially services for Non Resident Indians.

Application to Income Tax for Lower Tax Deduction Certificate – Through a qualified CA and keeping a grip on the traction so that the remittance back to Non Resident Indians after Selling the property is seamlessly transferred.

You can connect with Sandeep Sadh on ssadh@mumbaipropertyexchange.com

LinkedIn - https://www.linkedin.com/in/sandeepsadhmpe/