Ladies and gentlemen, good day and welcome to the PVR INOX Limited Q1 FY 2024 Earnings Conference Call, hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note, if the conference system is correct. I would now like to hand the conference over to Mr. Ankur Periwal from Axis Capital Limited. Thank you, and over to you, sir. Thank you, Carol. Good evening, friends, and welcome to PVR INOX Limited Q1 FY 2024 Post-Results Earnings Call. The call will start with a brief management discussion on our quarterly earnings performance, followed by an interactive Q&A session. PVR INOX management will be represented by Mr. Ajay Bijli, Managing Director, Mr. Sanjeev Kumar, Executive Director, Mr. Nitin Sood, Group CFO, and other senior management, including Mr. Alok Tandon, Co-CEO, Central, West, and East; and Mr. Gautam Dutta, Co-CEO, North and South. Over to you, Mr. Bijli, for the initial comments. Thanks very much. Dear all, I'd like to welcome you all to discuss the unaudited results for the quarter ended June 30th, 2023. I hope you've had the opportunity to review our presentation and results, which are uploaded earlier today in our company's website, as well as the stock exchanges website. Q1 of this fiscal started off on a slow note due to weak content in the month of April. The box office picked up pace in the month of May with the success of super hits like The Kerala Story from Hindi, 2018 from Malayalam, PS-2 from Tamil, and Fast X and Guardians of the Galaxy Vol. 3 from Hollywood. The momentum continued in June as we recorded the highest weekend admissions of 2023, primarily attributable to the blockbuster release of Adipurush. We are witnessing a consistent month-on-month increasing trend at the box office collection. The number of Hollywood releases have significantly increased when compared to last year. Strong performance of Hollywood films, especially in urban markets and special formats like IMAX, have immensely benefited us due to our robust presence in these markets and formats. The recent success of Hollywood blockbusters like Oppenheimer, Mission: Impossible - Dead Reckoning Part One, and Barbie, reaffirms our belief that audiences' enthusiasm for theatrical moviegoing remains intact when there is compelling content. Regional movies across languages also continue to do well. Carry On Jatta 3 has become the highest grossing Punjabi movie to cross INR 100 crore mark worldwide. Baipan Bhari Deva has become the fourth highest- grossing Marathi movie till date. The success of these regional films is a testament to the growing popularity and appeal of diverse storytelling. We remain optimistic about the continued strong performance of regional movies in the coming months. Volatility in Hindi films performance has reduced, and we've seen a quarter-on-quarter improvement in the average collection of Hindi films as well, with mid-scale movies like Zara Hatke Zara Bachke and Satyaprem Ki Katha performing well at the box office. PVR INOX welcomed 33.9 million guests across our cinemas in Q1 FY 2024. Coming to the financial results for the quarter, the following numbers are after adjusting for the impact of Ind AS 116 related to lease accounting. Total revenue for the quarter was INR 1,324 crore, EBITDA was INR 100 crore, and PAT loss was INR 44 crore. Pro forma financials of PVR and INOX combined for the same period last year, where revenue was INR 1,590 crore, EBITDA was INR 338 crore, and PAT was INR 142 crore. As we look ahead to Q2, we are quite optimistic about the robust content lineup across all languages. Over the next couple of months, we have several exciting Hindi movies lined up for release, like OMG 2, Gadar 2, and Dream Girl 2 in August, and Jawan, starring Shah Rukh Khan in September. From Hollywood, we have Meg 2, Blue Beetle, Gran Turismo in August, The Equalizer 3, The Nun II, A Haunting in Venice, and Expend4bles in September, amongst others. From the regional genre, we have Jailer, starring Rajinikanth, Bhola Shankar, starring Chiranjeevi, and King of Kotha, starring Dulquer Salmaan in August. Salaar, starring Prabhas, and Kushi, starring Vijay Deverakonda, and Samantha Ruth Prabhu in September, amongst others. On the screen openings, [PVR INOX] [audio distortion] 31 screens in Q1 FY 2024 and closed 14 underperforming screens, which form part of the 50 screens that we had guided for closure in line with our strategy to focus on profitable growth and improve unit- level economics. Our screen portfolio, including 38 management screens, stands at 1,707 screens across 361 cinemas in 114 cities in India and Sri Lanka. Now, I open the platform for any Q&A. Thanks once again for joining. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking their question. Ladies and gentlemen, we will wait for a moment while the question [audio distortion] The first question is from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead. Yeah, thank you. This is Nuvama Institutional Equities. I have three questions. The first question is on the footfall. Last three quarters, we are seeing that number of footfalls broadly in 30 million to 37 million. Now this month and last few weeks, we are seeing this word of mouth is also doing good and no controversy for the Hindi movies. We have a very good Hollywood movies, Oppenheimer, Barbie, MI, et cetera. Would you say that now we are moving from a, say, 29 million, 33 million to a much more robust number? Even Hollywood is also doing well. Regional is doing well, south is also, reasonably okay. Finally, Hindi seems to be doing well, and there have been some delay also. For example, Jawan got delayed by a few months. Is this helping to better, have better VFX, [audio distortion], et cetera? What is your take on Hindi movie revival and, sustainable footfalls [audio distortion]? I think, Kamal, would you like to answer that? Hindi movies, right? I think you've, in your question, you've captured all the reasons quite well. It is definitely, I mean, April, May, June were showing a lot of positive signals, in the narrative that Mr. Bijli gave the opening statement. He captured a few films which have done well, and those were very positive signals in the first quarter. We could see the build-up happening, and with the success of the three Hollywood films, now Rocky Rani, I think we are all set for a takeoff. We would not like to get into any specific numbers, but Hindi films definitely are finding favor with the audiences. A lot of, and Jawan, like you mentioned, because of VFX and to augment the marketing effort to ensure that they give the best output in terms of a film, a finished product to the audiences, we have taken more time, and I think this augurs well for the exhibition space and also for the film entertainment space on the whole. It's all looking very positive without getting into specifics in terms of numbers. One, one follow-up I had on the Hollywood, which is doing really well past few weeks. We also have the Hollywood strike, which is happening both on the scriptwriter, there's a strike, and also on the main star cast also now joining the strike. This could impact- Yes, this could impact the marketing of the movies. The movies may be ready, but the marketing doesn't happen in the release or again, this is next year. In fact, the pipeline is impacted. Would you be very worried about the Hollywood strike, or you think this will get self-resolved at some stage? We believe, it will get self-resolved at some stage, and at some stage will hopefully be the next, we reckon five to six weeks. That said, this is one of those areas, this is like weather. We have no control over this, but we're watching it very carefully. Our sense remains that over the next four to six weeks, there would be a solution because studios and both the Actors Guild, as well as the Writers Associations are working very closely. A lot of what we are seeing in media is also part of negotiation, but we understand from people we are talking to in Hollywood that there are, you know, the backroom channels are working at full speed, and there could be a solution at any point in time. Currently, the lineup of Hollywood movies continues to remain very robust. We have, you know, plenty of movies coming. We have Dune Two, The Equalizer, Expendables, Aquaman? At this point, there is absolutely no delay. If you were at the point that you mentioned that with the actors' unavailability, for promoting films, that would have an impact. We had the same challenge with Oppenheimer, and we've all seen the kind of results we've got. So, f ingers crossed. We're watching it very closely, and we will see how the situation unfolds. Thanks. My last question is on the very good scale up in SPH, 9% quarter-on-quarter versus ATP, only 3%. How much of the work in terms of augmenting INOX, in terms of some of the requirements on the [F&B] side, are already done? What is driving this sharp growth quarte-on- quarter higher than ATP, and how much of the job done in terms of INOX being brought up, [PVR] also is a continuous process. I just want to understand that. Abneesh a lot of work has been done in synergy of F&B is concerned. A lot of the INOX properties now, the menu has been changed, the new SKUs have come into place, and also new items, like, microwave popcorn, instant popcorn, all those things have been added. To make it further, a few INOX properties also are now selling non-vegetarian food. So whether it is the changing of SKUs, of popcorn and [Pepsis, or Coke] or whether it is introducing new MRP items, or whether it is changing the sales mix, all these have contributed to the increase in SPH. I would like to add, you know, on the comment you made on the average ticket price, we continue to retain buoyant. We're quite happy with the 3% growth that we've seen in this quarter. You would also appreciate that we are comparing this quarter, which was lacking blockbusters totally, and we're comparing it to Q1 of last financial year, which was full of blockbusters, one after another. As you know, you know, our ability to charge in terms of ticket price goes up. The willingness of consumers to accept our offering goes up when we have blockbusters and bigger films. We expect second quarter to sort of make up for the average ticket price growth. We remain quite positive on ATP growth as well. One very quick follow-up there. In terms of the F&B and overall what you're doing, I'm seeing a lot of innovation, marketing innovation also being there. For example, in non-prime time, those INR 99 s amosa and all those which are otherwise much higher. How is the response and what are you learning? Similarly, the 30-minute, INR 1, I think, cost in terms of being trailers, what is the response and the learnings from this? Sorry, hello. Sorry, sorry, please go ahead. Please go ahead. There are two. Okay. On the trailer show, we've got a fantastic response. We are changing those to about 22% occupancy on these shows. And what is most encouraging is that roughly about 40% of the audiences who are coming to watch these trailers are actually being tracked on booking a ticket to watch a film of one of the trailers that they watched. Clearly, this technique is working. It's just that given the fact that it's a trailer show for half an hour, nobody comes all the way to a cinema to watch this show. It's people around the mall and the destination who typically walk in to watch this half-an-hour show. That's on the trailer show. On the- What was your other question? On the INR 99. Yeah, that's doing exceedingly well. In fact, all the chatter around, you know, F&B pricing being too high is completely now mitigated. We've got fantastic strike rates at the cinema. Now, consumers are seeming to club, both tickets as well as F&B as a holistic experience cost, and which they are finding it a lot better, and we feel it's very timely, done both for weekends as well as for weekdays. Clearly it's showing a great positive move for the F&B. Thanks, that's all from me. Thank you. Thank you. Before we take the next question, I'd like to remind all participants to please limit your questions for participants only. You may rejoin the question queue if you have a follow-up. The next question is from the line of Jinesh Joshi from Prabhudas Lilladher. Please go ahead. Yeah, thanks for the opportunity. I have a bookkeeping question. If I look at that convenience fee, it has fallen by about 23% year-over-year on the pro forma basis. If my understanding is correct, we typically enter into some contracts to ticket aggregators and the minimum guarantee [audio distortion] to the term of contract, which you essentially impact, that there should not be a substantial rise or f all in this income. Could you just explain the behind this 23% fall? Yeah. Two things. One, our contract with BMS came to an end earlier this quarter. PVR has renegotiated the contract. The contract is more on the revenue share basis and not with a minimum guarantee commitment. Secondly, also, this is also the first quarter where, you know, INOX contract is also consolidated. INOX was already on a revenue share basis. Part of the impact that you see is due to, you know, drop in admissions when you compare it with Q1 of last year, and that's partly the reason. Secondly, there is no minimum guarantee. Now, it's a pure revenue share contract, which is similar to previous term. Can you share what is the quantum of our share [audio distortion]? We'll not be able to share any specifics, you know, with respect to the contract. Sure. My second question is, the debt level, which is up by about INR 150 crore on sequential basis.[audio distortion] th e last call, you had highlighted that our net debt levels will remain more or less constant, and CapEx funding is happening via internal accruals, but we have seen the debt levels move by about INR 150 crore or so. Any reason behind this? First of all, debt levels have only moved up by INR 70 crore at a net debt level, not INR 150 crore. I think our gross debt has moved up, that is because of our strategy to keep more cash on the balance sheet. You know, so net debt is only about INR 70 crore, and we stick by the guidance that we've given, but there will be quarter-on-quarter volatility. Some quarters, you know, which because we are on a CapEx plan, we are fitting out screens. Some quarters which have a lower EBITDA, you will see, you know, debt level marginally rising. You know, in some of the quarters where we have, you know, higher EBITDA, you will see debt levels decreasing. On an annual basis, there is no change. Sure. Thank you. I was referring to gross debt number. One last question from my side. I mean, we have the Cricket World Cup come up in India in the month of October, and historically we have been airing the matches on the Cricket [audio distortion]. Any, any particular contract [audio distortion], you are doing this time around, or [audio distortion]? Yes, we are. We, we, we are in process of signing the contract. We will screen just about any match that we wish to in the tournament. We will pick on those important matches, and we will be screening those matches, specifically all the India matches. Okay. Thank you. The next question is from the line of Arun Prasath from Avendus Spark. Please go ahead. Mr. Arun? Ladies and gentlemen, we've lost the line of the current participant. We proceed to the next question from the line of Harit Kapoor from Investec Capital. Please go ahead. Yeah. Hi, good afternoon. I just had two question. One was on the special formats slide, which is particularly on the presentation. you know, given that, you know, experiential films are actually doing even, you know, even better, probably even pre-COVID levels, you get a view that, you know, this 13.5% salience, which is special format, should, you know, be increased? I just want to get your outcome, how you're thinking about this. Yeah, I mean, these, already 13.5%, you know, as the slide said, in 229 screens, have some special format. Definitely, you know, this differentiates us even further from any other format of movie watching. I think consumers have given their verdict that when they go out and they see, you know, these movies, they become more impactful. As I said, big movies become even bigger. We are rolling out more and more of these in our, you know, various properties which are coming up, and also in our some of our existing properties, which we're retrofitting and renovating. We are also introducing various formats like IMAX, ICE, 4DX, MX4D, and also LUXE, [Insignia], [Director's Cut]. All these special formats, definitely they have a room, further room for growth. In terms of overall mix, this number should keep increasing. Any target that you have in mind, maybe percentage of industry, maybe one year, two years out? We don't look at it from that perspective. We look at it very specific to each market and what is the right fit for each market. Obviously, this percentage will grow and would land up anywhere between 15%-20%. You know, very difficult to put a target of any perspective, but maybe because we're very focused on building the right product for each market, but we should get to anything between 15%-20%. Got it. The second question on the cost side, you know, any expenses, incrementally which you want to call out on the merger? Any, any cost there in Q1, what was there in Q4, is pretty much done with? Yeah, I think merger- related pretty much we're done with most of the expenses. There is no, you know, merger- related expense, appearing in Q1. Got it. Lastly, you know, I just want to understand the occupancy math, y ou know, on your numbers. T he occupancy are kind of flattish on a Q- over- Q basis, while, you know, footfalls are up more than 10%. Is this only primarily due to higher number of shows, and is that only the impact of June? [audio distortion] That's correct. We've played higher number of shows this quarter, and that's the reason the occupancy percentage is appearing similar to what it was in Q4. You know, February and March are very slow months for us, and we had cut down a lot of shows during those two months. Yes, we increased the number of shows during this quarter. Got it. I have some more. I'll come back on to you. Thank you. Thank you. The next question from the line of Jay Doshi from Kotak Securities. Please go ahead. Yeah. Hi, thanks for the opportunity. Nitin, is it possible for you to give some color in terms of, you know, where are you in the journey of capturing synergy that you had called out? What percentage of the overall target that you, that you've already achieved? So that's my first question. I think it's still early days. We've done a lot of work, you know, on that front. F&B is the first one which can kick off. We are seeing some very promising results. We're already seeing some part of that synergy kicking in, in Q1. I think more will follow in Q2, Q3, and Q4 later this year as we implement more and more initiatives across the chain. F&B is completely on track. In bulk of our ticket price, synergy will flow in, in Q3, Q3, and Q4. Quarter 1 was, you know, when you compare it to Q1 of last year, was, you know, it was not possible to get a ticket price increase at that level. We harmonized, you know, a lot of stuff at the operating level, including harmonizing the programming efforts, ensuring, you know, the shows are programmed quite well, ticket price standardization. All of those initiatives have been implemented on the ground, and, you know, they will start reflecting in Q2, Q3, Q4. I think advertising is one number which is currently lagging behind. You know, once, once the box, box office recovery plays out, maybe later half of this year is when that will start kicking in. On the cost front, we are running absolutely on track. In fact, running slightly ahead of what we had thought we'll be able to achieve. You know, in Q2, Q3, we will start, getting some of these synergies reflected in the bottom line. Maybe later part of this year, you know, we will be sharing an update on where we stand with respect to the synergies. Understood, thank you. You know, I have a question on Cricket. Now, this World Cup is a one-day format, right? So, you know, from that duration, have you in the past, experimented and what kind of, traction or demand do you anticipate [audio distortion]? We have done many shows for one- dayers. Typically, how it works is, if we go to corporates who end up sponsoring a certain match. A nd they are the ones who would call in people, it could be the whole lot of dealers or consumers, that they would kind of invite. Some bits of the tickets in the auditorium are also left for us to sell at the box office. That's how it's largely done. People come and go, and it's like a bit like a carnival or a mela, that happens at the cinemas. There are face painters and dhol wallahs and stuff like that. We, we make it out of really like a carnival. In the past, we've seen some of the key matches garnering some great interest across. So we have to be choosy about the matches we pick up. It can't sort of play out for all the matches, but surely some of the key matches and, and, and India matches will be sort of picked up for screening. We are 100% sure that we'll get corporate sort of participation for this as well. That's all. Thank you so much. Thank you. The next question is from the line of Arun Prasath from Avendus Spark. Please go ahead. Thank you very much. First question is on on the ad revenues. As you mentioned, it's yet to recover completely. Can you just give a high level, high category level commentary on what is lagging, what is, what has recovered? Is it because we have already more or less seen these footfalls coming to normalized levels, et cetera, except for Hindi. Should we assumed this is a normalized level of ad revenues? No, clearly not. I think, starting Q2, as Nitin had just mentioned, the recovery will clearly be seen. By Q3, which is also the festive period, we will see fairly normal levels of advertising coming back. Thanks to some of the big releases that happened in the month of July, the, the overall, you know, the noise level around cinemas, is lot better now, very positive. We are getting some big accounts back. What was missing has been the absence of some long-term campaigns because of the overall negativity in the market about which films are doing well, is Bollywood be able to deliver a success or not, and when a Hollywood film could do well. All that noise has completely died out now, and we are now over the next 60 - 90 days in the market to close some of the long-term deals. Even sectors like telecom and consumer durables is, is something that we believe will come back very strongly e ven. Hopefully, we'll be able to report some very strong numbers starting Q2. Okay. so this confidence obviously depends upon the footfalls coming back. Is this the, is this the right understanding? Actually, both. In advertising, more than even footfall, you need big banner films and you need a certain positivity. The good thing is that happened. Clearly, films which have performed, have left a dent with the advertisers to say that they've missed out on an opportunity. We have, the entire team have kind of used this as an opportunity to create more conversations with clients. I think the hard work is all done, and now we are ready to reap the benefits of some of the good marketing that has been done by big films over the last couple of months. We are now on path. It's not as if that we are waiting for any more recovery to happen. You mentioned long-term deals with the advertisers. Was it the case, pre-COVID as well, or more like a spot selling? No, it was always there. We always had, about 10, 15 very big clients who would be with us advertising for, 8- 12 months of the year. Those were kind of missing in action so far, and we hope to get them back very soon. Understood. Thank you. Second, my second question is on these box- office collection from regional. It seems to be around 20%, the overall regional box office period and of share is for certain countries. Whereas for Indian- H ollywood, it is almost 50%. What are our plans to address this anomaly? Why or what are the current bottlenecks we are facing in achieving that? Repeat your question, please. Your voice was cracking. We couldn't get the question properly. Could you please repeat it? I was asking, if you see the total regional box office collection and our share of the regional box office, it is closely-- it's, it's hovering around 20s%. Whereas in Hollywood and Hindi, it is around 50s%. What are the steps we are taking to bring these regional box offices at par with the share of regional box office at par with the other languages? This was my question. That's a very good question. We just need to grow more in the southern territories. the southern films, regional films. When you say regional, I'm assuming you're referring to the South Indian films. Because for Punjabi films, Marathi films, the contribution of PVR INOX, even for Gujarati and Bengali films, contribution of PVR INOX is similar to Hindi. F or southern films, because they penetrate deep, they travel deep into smaller centers, we need to increase our penetration more. That's, that's the roadmap. I would just leave it at that. That means most of the need to go into, say, Tier 2, Tier 3 cities, but obviously the mall, mall, mall coming up in these, say, cities or towns is obviously not to the mark. So this roadblock will always be there or we can do something about it? We are adding, we've already guided that we are adding a lot of screens in South India. In fact, 40%-45% of our total screen additions right now are in South India alone, and we will build according to the right opportunity. We are entering new cities, you know, every year. This year we've entered Machilipatnam, you know, is a city which we are entering. We entered Armoor, we enter, we've entered in Nizamabad, you know, earlier, last year. A lot of new city additions are happening as we go along, but we wait for the right opportunity to build a PVR property. Even in big cities, we are adding, you know, a lot more cinemas. We just opened, you know, very large 12 -screenp lex in Bangalore with Prestige in Kanakapura, and that's in the road running. It's, you know, already performing very well in the first two weeks itself. There is a lot of focus on adding more screens in South India. Understood. Just one last question on this. Sorry, [Mr. Arun], may I please request you to please run this for a follow-up, as we have many people waiting for their turn. Sure. Thank you. A reminder to the participants to please limit your questions to the participants only. The next question is from Lavanya Tottala from UBS. Please go ahead. Hi, hi, sir. Thanks for the opportunity. Just bookkeeping questions. I wanted to check how you see employee costs going ahead with upcoming quarters, and also, the depreciation as you reduce the number of screens going ahead along with the addition. Employee costs will grow with inflation. You know, we are bound for large part of our workforce with minimum wage, you know, increases. You know, from a headcount perspective, you know, at least at a site level, we are at a optimum headcount level. I don't see any reduction at, at least at a site level. That cost will grow with inflation or with minimum wages, as the case may be. At the depreciation level, I don't see any, you know, significant impact while we are, you know, shutting down screens. Most of those screens have come to the end of their life cycle. They're already depreciated to a large extent. Depreciation would only change based on the new screens that we are adding, effectively. No big substantial change other than addition of depreciation of new screens. Okay. Anything on the new interval high ticket pricing, like continuous screening, any different kind of offering that you are planning? Or no interval, no ads, but a higher price, something like similar to OTT, but a bigger screen experience. No, not really. Currently, we aren't planning anything, screening without an ad or anything, which gets priced on account of no ads. That isn't in the plan. Okay. Thank you. Thank you so much. Thank you. The next question is from the line of Nikhil Garg from BNP Paribas. Please go ahead. Hi, sir. Thanks for the detailed presentation. I have a couple of questions. One on quarterly results and second on technically the most structure in this one. On quarterly results, if I look at on a Y-o-Y basis, your EBITDA is down from INR 300 crore to INR 100 crore, and this is despite, you know, higher ATP, F&B spend per head, lower volatility in the movies, and much higher number of Hollywood movies also year-over-year basis. Would it be fair to say that to achieve INR 300 crore of EBITDA, we would need one whole month to file and probably two big hits every quarter? If we have, like, you know, one big hit only, Pathaan in Q4 or Avatar 2 in Q3, then we would be somewhere in middle. That's my first question. Yeah. You know, the answer to your first question is that, you know, our business is a very high operating leverage business. We run a certain fixed- cost structure for all the properties that we have. You know, number of footfalls has a direct impact on the overall profitability of the business. When you compare it with Q1 of last year, Q1 of last year was one of the best quarters ever in the box office history. We had almost INR 1 crore more footfalls than this quarter. That is, that reflects operating leverage, you know, directly on the bottom line. You know, obviously Q1 has been a slow quarter. April was a very slow month, and May and June have built up. We're still trending significantly low on footfalls as compared to, you know, what we did in Q1 of last year or even prior to pandemic. As the momentum picks up, you know, July has been an excellent month. As the footfalls increase, the operating leverage due to higher admissions, you know, will reflect directly on the bottom line. That's, that's broadly, you know, the answer to your question. Just to add to this question only on a quarterly result basis. Basically, you could given the content remains also volatile on a quarter-on-quarter basis, we could expect, you know, this kind of volatility to continue. I mean, it's not that something structurally has changed for the content to, you know, be, you know, on an improving trajectory from here, and therefore, we don't expect the volatility in content going forward? We don't have an answer. We can only say that there is a good lineup of content. There's a lot of, you know, pessimism around Hindi film underperformance, which was there and has been kind of done away with in the last few months. We've seen small to mid-budget films doing quite well. The volatility in Hindi box office is reduced considerably. You know, the share of negative noise has gone down, died down. Films are hitting INR 100 crore benchmarks, and we have a good lineup ahead. Hollywood film, you know, a slate which was very low last year, you know, has got supplemented. This has been one of the best Hollywood performances over the last few months, and all the films there have been doing exceptionally well. Hollywood is back, both in terms of content availability as well as box office performance, and regional films continue to be a stable fare. Yes, there will be quarter -on- quarter, you know, ups and downs, depending upon what content is coming up in each quarter. We see lot more stability in all the language content and, you know, that is reflected in, you know, back-to-back success of last four or five films, starting from May with Kerala Story, then Zara Hatke Zara Bachke, followed by, you know, the Kartik Aaryan film and then MI7, Oppenheimer, Barbie, and Rocky and Rani. There is a lot of positive sentiment and, you know, this is something with which we started the quarter and hopefully this will continue in August and September. Sure. The second question is, have you given a thought on, you know, stopping expansion in metro cities? The reason why I ask is that, you know, like, for example, if the demand for a particular movie is more than supply for that particular week, then our footfalls move to second week, which in fact, should be more profitable for us, right? Second week, our distributor share would be lower and, you know, you would get more. Expansion in metros would prevent that. Second, in the scenario where demand is in fact less than the supply for that particular movie, for that particular week, our occupancies in fact take a bigger hit, and therefore our profitability also goes down. Are we thinking something on like, you know, stopping expansion in the current metros like Delhi, Bangalore, where you already have enough presence and going into more into tier two, tier three towns only? No, that's not the case. We are not stopping expansion into metros. When you talk about going into Tier 2 and Tier 3, we are already present in, whether it's a metro or a Tier 1 or a Tier 4. We are present all over. We are present in 114 cities. Just to tell you that you said that there'll be more footfalls in metros. My only answer to that is that today India is a very under-screened nation. We still have about 3.2 multiplex screens per million population and about 8.5 screen to 9 screens per million population, if I add all the screens in the country. Today also, there's a lot, opportunity for us to grow, and I don't think that we as a chain will ever stop expansion, whether it's a metro or even in a Tier 4. All right, sir. Thank you very much. Thank you. The next question is from the line of Rohit Gupta from Fullerton Fund. Please go ahead. Hi, good morning with my question. Based on the current net-debt levels, business outlook and screen additional time, do you see any need for fundraise, let's say, next one year? No, we have no plans to do any fundraising during the next one year. As we've guided, you know, we fund, we aim to fund all our growth from internal accrual. There is no plans for any fundraise. Okay, thank you. Thank you. The next question is from the line of Abhishek Banerjee from ICICI Securities. Please go ahead. Yeah. Hi, sir. First, actually on the revenue sharing contract, which you have been, you know, discussing with a lot of landlords, could you give some color on how that is working out, especially now that crowds are back to the theaters? Are you talking about existing properties or are you talking about new properties? New properties. New properties as well as existing properties which you are managing to renegotiate. Yeah, all of that is work in progress. Most of the new properties, you know, are structured on a minimum guarantee or a revenue share basis, whichever is higher. That's broadly the structure of our deals. The minimum guarantees have come down from what they were, you know, and the, the revenue shares are where they were. Yeah, we've been quite successful in pretty much, you know, renegotiating most of our, you know, leases for upcoming properties and have achieved a lot of success. In some of our existing properties, which are underperforming, where the rental cost is high, we are currently in discussions with some of our landlords and hopeful of, you know, getting some success there as well. I understand. One more thing on this, post the merger, I'm sure you would have a lot of properties where there is a significant overlap in the catchment area. The recent, you know, closures that you announced, will, will that also be to kind of, you know, reduce the overlap of properties? Not really. I think from a screening perspective, I think bulk of the screens which we are deciding to shut down are in catchments which are either, you know, either rundown or, you know, we built cinemas 10 or 15 years ago. Those malls have become dilapidated and have not become relevant with the passage of time. In a lot of cases, you know, those malls cannot also be revived and the properties cannot be revived. As a result of which, you know, we've decided to shut them down. In some cases, there could be overlap situations as well, but generally, as a principle, I don't think that's the area for concern and the reason for shutdown of any property. Overlap is not a concern at all. Areas where we have an overlap, we do our programming differently. For any guest, when he does not get a ticket in one particular place, he can walk across or just drive across in a few minutes to the other property. We're using that to our advantage to have different programming so that a guest is never turned back in, in a high- volume day because of lack of tickets. I understand. I understand. And, and just one last question. Regarding what you see, in this month, July, what would you say? I know you might not be willing to give out a number, but qualitatively speaking, how would you rate this month, in terms of, you know, historical trends? The 60%-65% kind of occupancies in English movies, I don't think I've ever heard of, that kind of occupancy in business. Well, you know, we are always worried about the prospects, and sometimes our, you know, business has peaks and valleys. There are times when we peak in terms of occupancies, and there are times where films underperform vis-a-vis expectations and, you know, results are not occupancies, and percentages are not as per expectations. So it's difficult to predict, and we've always sort of encouraged, our friends in the analyst community to see the business on an annual basis and not on quarter- to- quarter basis, because quarterly occupancies can be fairly volatile. At this point, like we mentioned earlier, we've been seeing positive signals in April, May, June. We look pretty set to take off in terms of admission numbers, so we are fairly positive, f ingers crossed, I think we will see numbers hopefully that we've not seen before. Perfect, sir. Thank you so much. Really best of luck for the next couple of quarters. Thank you. Thank you. The next question is from the line of Anurag Dayal from HSBC. Please go ahead. Hi. Thank you for taking my question, sir. Could you give me an update on the loyalty program in terms as has loyalty programs of PVR INOX integrated already, or you have some plans? What is the membership today, and do you track to what percentage of the ticket internally, what percentage of ticket is come by these loyalty programs and your plans ahead? We have close to about 20 million each, you know, members, both for PVR and INOX, so about 40 million in all. However, our current loyalty program is coming towards an end. We have already issued, you know, communication to all the members across PVR and INOX to say that the point-based system is coming towards an end. Towards H2 of the year, we, we will embark on a new personalized loyalty program, which will really focus on a little more active involvement of the consumer and seeing how we could sort of push the consumer for higher consumption at the cinemas. Okay, thank you so much. Just one small bookkeeping question. There have been sequentially 39% jump in electricity and electricity charges. Is there any one-off here or reason behind it? No, there is no one- off there. That's the nature of the business, that due to change in seasonality. You know, we have a lot of properties in North India, and in winters you don't have high air conditioning bills. In summers, you have air conditioning bills, which are very high. There's nothing that's quite normal in our business. Q 4 is the lowest quarter in terms of electricity consumption, and in Q 1, Q2, Q 3, you know, the electricity consumption is high. Okay, thank you so much. Thank you. The next question is from the line of Pulkit Chawla from Emkay Global. Please go ahead. Yeah. Hi. Thanks for the opportunity. Just wanted to get a sense on the Bollywood movie releases. This quarter you're expecting probably six to seven Bollywood movie releases, and probably the next quarter would be a similar sort of number. Now pre-COVID, the number of Bollywood movie releases is cost used to be slightly much more, more high. Just confirm regarding the number of movies getting released in the country? I think the num- films are, have been fairly steady in all quarters, and they continue to solidify. Our problem in the past has been the quality of films. The success ratio of Hindi films performing at the box office has left a lot to be desired. I think the good news is that the success rate is improving in a noticeable and firm manner. Thankfully, in this quarter and in the subsequent quarter, including third quarter, we have some very strong quality films, some trending content, and fingers crossed again, hopefully, the success ratio will also be better than what we've seen in the last few quarters. Thanks for that. Thank you. Thank you. The next question is from the line of Jensen Jacob from Centra Insights. Please go ahead. Hi, thank you for taking my question. My question was on the growth front. This quarter we have only added 15 screens, and could you please throw some light on why are these additions running so low? Well, I don't think that the admissions are, the additions are low. We have opened 31 new screens in Q1. In Q2, as we speak, we have opened another 15 screens. As we said, just this afternoon, we opened one in Patna. Overall, we have already opened in this financial year, eight properties and 46 screens, which I don't think is low by any standard. The target which we have given for opening the number of screens this year, we'll be on target to achieve those. Okay. What is the target that you've given as a combined entity? Well, it's about anything between 150 screens to 160 screens to 165 screens. As I said, we've already opened 46 screens till today, and we are on target for the remaining. Okay. Thank you. That's on my side. Thank you. The next question is from the line of Sumit Sarda from Compound Everyday Capital. Please go ahead. Yeah, thank you. I appreciate the guidance that you have given, you want to go only through internal accruals. I want to go one step further, and maybe ask that given the, you know, content volatility and cost structure inherent in our business, do we have an aspiration to go zero debt and improve the resilience and robustness, robustness of our [audio distortion]? Yeah, I think that will automatically happen with the passage of time as the operating earnings start kicking in, and the focus will be post- growth, whatever is the free cash flow left to reduce the leverage on the balance sheet. That's, that's the way we think about the business. Do you have any medium-term clear target, maybe in five years, you want to do that? Yeah, I think we should get there in three to five years. Maybe earlier, depending upon how, how soon the operating earnings comes back and what is, you know, the free cash flow generation based on that every year. Thanks, sir. That's all. Thank you. The next question is from the line of Khush Gosrani from InCred Asset Management. Go ahead. Yeah, hi. Thanks for the opportunity. sir, I just wanted to ask, a lot of the medium-tier Bollywood films are going towards OTT, and OTTs themselves have started to produce a lot of increasingly budgeted films. How is it impacting our footfalls say as of now, and what's the overall view on the OTT window as well? Yes, there are movies which are made only for the OTT, and there are some movies which are made for the cinema and then they come on OTT platform. It's not that all movies are going to OTT. It's always said that for a giant screen experience, for unconquered sound, for absolutely clear image, larger- than-l ife movies are there to be enjoyed only in a cinema hall. Yes, there are a few movies which have taken the OTT route only. That's the, that's the will of the producer, the person who's already made it. Let me tell you, with the football we have seen in the last couple of weeks, be it Hindi movies, be it, movies in other Indian languages or Hollywood movies, I think that movies are here to stay, and it's only a matter of time before great content again kicks in and people again have- They come back to the cinema halls. Sure, sir. So but this does not, so this then increases the our- Sorry, the increases are what you could say, the dependency on the big budgeted or the higher budgeted films, right? Across the languages. I don't think that comparison is absolutely right. It's really a change to the big screen of the big screen, and as a concept, it would naturally be great footfall. Sure. On the advertisements, revenue income side, what was the year-over-year comparable growth for us in this quarter? Last quarter, Q1 was INR 93 crore, and we are INR 89 crore this time. Again, in Q4, we were again INR 93 crore. Basically compared to INR 93 crore to INR 89 crore this year. Last question, and you don't see there to be a structural impact to the advertisement income, right? No, it will bounce back very sharply, and we strongly believe in, because once cinema starts to sort of deliver footfalls, which it has, and the story is now going out very strongly. We've been out of the game for close to about couple of quarters during COVID, and this has taken some time for the market to stabilize. We are working very strongly with all the media planners and buyers, and we are hoping for a sharp recovery starting Q2. Perfect. Thank you for answering questions. Thank you. Thank you. The next question is from Arun Prasath from Avendus Spark. Please go ahead. Thanks for the follow-up opportunity. I was gonna ask, what is the percentage of screens do you think is currently kind of underperforming and pulling down your overall numbers, which will probably, which itself are candidates for the future closures? We've already given that guidance, that we believe it's the bottom, you know, 2%-3% of our screens is what we intend to shut down, which we don't think are reliable. That number will be between 50-60 screens, you know, is broadly what we intend to shut down. Okay, thanks. I got disconnected. No issues. Second, just on the bookkeeping, the audience who are coming to watch trailers, you said, these are part of the footfalls that we are showing in our, in our, our report or in part of the ATP and SPH calculation as well? Part of the, yes, they are part of the report, reported numbers. Yes. Yeah. That means, actual ATP excluding this trailer is, is higher than cinema today? Yes, absolutely. There will be a marginal difference. Sir, we can give the actual number of admissions this quarter on trailer screening. It's about INR 4 odd lakh. It's about INR 2.8 lakh per cinema. Yeah, INR 3.8 lakh. Yeah, right. INR 3.8 lakh. Okay. INR 3 lakh, sorry. INR 3 lakh, INR 3 lakh. INR 3 lakh for the quarter? INR 3 lakh for the quarter. My understanding is they may not be contributing to ATP, but obviously they'll be contributing to SPH, right? Yes, a little bit. Not as significantly, as a movie, you know, consumer does. They are into the cinema only for about half an hour. Yes, they do end up buying some F&B, but not as significant, as a movie consumer. If you were to get this INR 3 lakh out, both ATP and SPH will marginally go up. Understood. Thank you very much. Thank you very much. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Yeah. Thank you, everyone, for taking the time to attend the PVR INOX Q1 Earnings Call. If you have any follow-up questions, feel free to reach out to us individually, and we'll be happy to answer your questions on a one-on-one basis. Thanks for calling. Thank you. On behalf of Axis Capital Limited, we conclude today's conference. Thank you all for joining. You may now disconnect lines.