Good afternoon, everyone. I welcome you all to PVR INOX quarter four FY '26 earnings call.

The call will start with brief management remarks on the earning performance followed by interactive Q&A session. PVR INOX management will be represented by Mr.

Ajay Bijli, Managing Director; Mr. Sanjeev Kumar, Executive Director; Mr.

Gaurav Sharma, CFO; and others senior management personnel. Over to you, sir.

Good evening, everyone. This is Ajay Bijli.

I'd like to welcome you to discuss the audited results for the quarter and the year ending March 31st, 2026. The earnings presentation and results were uploaded to our website and the stock exchanges earlier today, and I hope you had a chance to review them.

FY '26 was a defining year for PVR INOX. We delivered our best ever financial performance, brought net debt to a negligible level, and pivoted decisively to a capital-light growth model, even as the Indian box office reached an all-time high.

Today PVR INOX is structurally stronger than at any point in our history. Within India's exhibition industry, PVR INOX stands apart as a well-loved consumer brand with unmatched market leadership and scale.

Today we operate nearly 40% of the country's multiplex screens and capture 31% of India's box office with prime locations, premium formats, and the trust audiences place in our brand. We are the preferred partner for India's leading mall developers and top film producers, and the industry we lead is itself on a strong long-term trajectory.

India's box office has grown at a 7% to 8% compounded growth rate over the last decade, reflecting the sustained structural demand for movie watching in cinemas. Theatrical-first is now firmly the dominant release model as producers and OTT platforms alike recognize that theatrical performance sets the quantitative and the qualitative benchmark for a film.

Against this backdrop, FY '26 was the strongest year in the industry's history with collections rising 11% to 13,519 crores. The standout was a resurgence of original Hindi cinema with Bollywood collections growing 55% year-on-year, delivering its best year ever.

English cinema also delivered a strong year, growing 54% on a robust slate of Hollywood releases. Another big positive trend in FY '26 was a solid comeback of mid-scale films grossing between 100 to 200 crores, which saw its share rising from 12% to 20%.

Growth is now broader, more resilient, and less dependent on a handful of mega blockbusters. Coming to our performance, Q4 FY '26 recorded our highest ever fourth quarter collections supported by titles like Dhurandhar, The Revenge, Border 2, Project Hail Mary, amongst others.

We welcomed 31 million guests in the quarter and 150 million across the year, which was a 10% growth over FY '25. ATP for the year stood at ₹280, which is up by 8% compared to previous year, and SPH at ₹147, up by 10%, both record highs.

In Q4, ATP touched ₹315 and SPH ₹165. On an Ind AS 116 adjusted basis, FY '26 revenues was a record of ₹6,742 crores, up 16% year-on-year.

EBITDA before exceptional items doubled to 968 crores rupees, 968 crores, with margins expanding from 8.4% to 14.4%, reflecting both strong revenue growth and the cost discipline we have sustained for several years. FY '26 also recorded the highest ever PAT at 386 crores against a loss of 152 crores in FY '25.

For quarter four, revenue grew 25% to 157 1,577 crores, EBITDA rose nearly sixfold to 269 crores, and PAT was 178 crores versus a loss of one about 10 crores 106 crores. PAT for Q4 '26 and fiscal 2026 also included gains on the divestment of 4700BC to Marico.

On growth, our model has pivoted decisively to capital-light. Of the 93 new screens added in FY '26, 55% came under capital-light formats with around 44% of additions in underpenetrated South India.

Screen exits dropped sharply to 18 from 72 last year as a post-merger portfolio rationalization is largely behind us. Our signed capital-light pipeline now stands at 138 screens, 52% FOCO and 86 asset-light.

CapEx intensity is down 24% on a yearly basis. Robust operating performance, sustained cost discipline, and reduced capital intensity have driven consistent free cash flow generation over the past three years with FY '26 free cash flow reaching an all-time high of 790 crores.

This cash flow has been deployed towards debt reduction, thereby strengthening the balance sheet. Our net debt now is nearly down 90% since the merger to a negligible level of INR 161 crores as of 31 March 2026.

Return on capital employed has improved to 10.2% in FY '26, a clear breakout, and we will continue to work towards improving it further. Looking ahead, FY '27 content pipeline is broad and diverse across Hindi, English, and regional cinema, giving us strong confidence in the trajectory.

On the Hindi front, anticipated titles include Cocktail 2, Dhamaal 4, Welcome to the Jungle, Awarapan 2, Ramayana: Part 1, King, Love & War, and with several other films also lined up. Regional cinema continues to offer exciting content lineup like Thug Life, Toxic, Jailer 2, Spirit, amongst others.

Hollywood is lined up with Masters of the Universe, Toy Story 5, The Odyssey, Spider-Man: Brand New Day, Avengers: Doomsday, and many others. We enter FY 27 '27 with the strongest balance sheet in our history, an exciting and diverse content slate, a strong pipeline of new screen signings, and an industry tailwind that is structurally stronger.

We are confident the next chapter will compound on what we delivered this year. With that, I open the floor for questions.

Thank you.

Thank you, and congrats on fantastic debt reduction. That will be my first question.

In terms of debt, obviously now it is negligible. What will be your expectation given light-asset strategy going ahead in next year, FY '27 also?

What kind of screen addition you expect? What kind of own screen versus the low-asset model?

What will be the plan once you have net cash? Would you like to start dividend also?

Firstly, the pipeline, about 120-odd screens visibility that we'll be opening next year. The percentage of screens opening in FOCO and asset-light model was 55% this year.

It'll continue to be between 55% to 60%. That is your first question.

Secondly, with the kind of lineup that we're looking at, I think we will continue to have healthy cash flows. Definitely we want to get into a situation where we are cash-positive.

Of course, then the board will meet and decide what should be done with the accruals. We haven't given it much thought at the moment.

Gaurav, would you like to add something to it?

I think you've covered all the key points. Sir, nothing incremental.

Okay. Sure.

My second question is slightly on the macro side. Two parts to that.

One, of course, Prime Minister has said yesterday not to buy too much gold jewelry next one year and not to travel outside also. Now obviously, diesel and petrol price hike is just a event which will happen very quickly now.

Would you expect some kind of a consumption impact on multiplex viewing also given urban disposable income can get impacted? Slightly related question, one of the key South Indian state now has a Chief Minister who is obviously one of the biggest hero.

Any possible positive news either in that state or any of the other state, any positive regulatory you expect in the medium-long term? Not asking immediate because these things can't be predicted.

Yeah. Firstly, I must tell you that obviously, if the macroeconomic scenario is something that the PM has spoken about and asked to take such an austere measures, that's all due to the West Asia crisis and obviously that doesn't sound that good overall.

Having said that, history has shown that cinema being still a very small ticket size, if you look at PVR ATP is 280 and overall if you look at India, the average ticket price is somewhere between 100 150 maybe, if you look at all the single screens, multiplexes which are there, and average transaction size is 2 to 2.5 when people go and watch a movie. Typically, history has shown that, I don't want to use the word recession, but I'm just saying in challenging times, cinema going actually benefits.

People do go out and then they eliminate all other discretionary spends of traveling and other things that they do, leisure activities. Cinema generally bounces back and people do like to entertain themselves in the cinemas.

I'm not saying that it's good what is happening as an impact of West Asia crisis, but we do not directly see that there will be any impact to our own business due to this.

On Tamil Nadu or any of the other state, anything positive you expect given regulatory changes, government changes?

It is too early. He just, I think, only today is become the CM.

I don't think that is probably on number one on his agenda as just now. We don't know of any regulatory positive or what kind of news is going to come out of Tamil Nadu.

Last quick question. If I see your revenue stream, advertising seems to have been the slowest growth.

Obviously, now there'll be margin pressure for all corporate advertisers and even non-corporate advertisers in Q1 and possibly Q2. What will be the outlook on that?

When I analyzed IPL, in cities where IPL has been held and cities where there's no IPL actual match, have you seen box office performance different? Because, say, in Bombay, there is a IPL match.

Obviously, customer has a choice. In a city like Patna where there is no IPL match or say any other city like that, are you seeing box office growth in Q4 where IPL has been there a bit faster in such cities?

No. I think IPL has no impact on cinema going at all.

We've seen no correlation. Many movies have got released in the last few weeks ever since IPL has started, whether in the city where they're being played or in any case, the city in which it is being played, there's only so much capacity that that city can take in its stadium.

All these cities are pretty populated. I think both of these things are very different forms of entertainment.

Those who want to watch cricket, they watch cricket. Those who want to go and watch a movie, they watch a movie.

I don't think one eats into the other at all. We haven't seen any evidence of that.

As far as advertising is concerned, I will let Gautam Dutta, our CEO, address that question for you about the impact of any challenging times on advertising revenues. Gautam, would you like to answer that?

Yeah. Thank you so much.

First and foremost, I would want to also add on IPL. We are also screening quarterfinals, semifinals, and the finals in our cinemas, and completely validated what Mr.

Bijli said, that there is absolutely zero impact. In fact, it plays pretty well for us, and there's been absolutely zero impact.

On advertising, while these numbers are a bit subdued, most of our growth this year also came in from a lot of sleeper hits which became really, really big at the box office, which was great news. There were about two or three big blockbuster films like Jana Gana Mana and Toxic which technically moved.

If those two films would have got released because they were a Pongal release and then a early Jan release, that would have actually helped us to register at least a 7% to 8% growth on advertising. Largely we are on track.

It's just that some of the big blockbusters moving has kind of impacted. Whenever a movie moves, there is a bit of a vacuum that gets created, and because of which this happened.

Having said that, this year seems to be a very balanced year both in terms of Bollywood, Hollywood, as well as regional. While the primary growth in advertising the way we are seeing will come in H2 simply because of the mega titles getting released in October, November, December period, but we are well-poised this year to be on our projected growth path as we've shown over the last so many years, and there would be no deviation there.

Sure, thank you. That's all from my side.

Hi. Thanks for the opportunity, and congrats on a strong year.

My first question is on the pipeline. Currently based on whatever in the pipeline, what's the conviction in terms of footfall growth or occupancy for FY '27?

Any any guess you can hazard for us?

You're talking about the pipeline of this full year?

Yes, FY '27.

Yeah. I can start from this quarter itself.

You've got this Pati Patni Aur Woh coming. Then you've got later on, so many films.

Odyssey is there. Ramayana is a big one.

Drishyam 3 is coming. You've got Dhamaal.

You've got Welcome to the Jungle. You've got Cocktail 2.

There's a movie called Chaand Mera Dil which is coming. Later on, big movies like Odyssey.

In Hollywood films, you've got this time Star Wars, Toy Story, you've got Evil Dead, Odyssey is a very big one, Spider-Man is coming, Dune 3 is coming, Avengers, which is always very big in India, Jumanji, a lot of regional movies. Toxic is bound to come this year.

There was a gentleman was asking the question about the newly appointed Chief Minister of Tamil Nadu. His movie, Jana Nayagan, is coming.

That's got a very good traction. Thug Life is coming.

Gabru of Sunny Deol is coming. Plenty of movies.

I can rattle off the entire lineup, but I think this should be enough. You're okay with it?

Given this backdrop, are you confident that occupancy levels will keep inching up? Can we maybe pencil in more 27 plus for FY '27?

Or how are you thinking internally?

The trend is only that it goes up. I've been talking to a lot of people about the macro picture of India.

1,500 films get released every year. Movie by movie, if one movie does well, one doesn't do well, doesn't matter to us that much.

When on overall basis, I think there's a CAGR growth of 8% in the Indian box office. Our occupancies are increasing.

The number of films which are the bracket of 100 to 200 crore movies is only increasing every year. The bracket of 500-plus movies has only been increasing post-COVID.

Obviously, all these factors more and more investment is being made by the film fraternity into movies for the big screen. If you look at OTT versus exhibition, there was a EY report which basically just got released wherein calendar year 2022, 217 movies first came to the theaters and 105 came to OTT.

This year, 470 have come to theatrical and only 30 have gone to OTT. A theater-first model is a very clear model for all the producers.

I think there is no reason for us to not be optimistic that occupancies from now on are only going to improve.

Sure, sir. Thanks for that.

The second question was on one of your growth vectors which you mentioned about tier two and below cities. Any update you can share on the smart screens pilot, which and what kind of running?

Yeah. I think by July 15th, a couple of pilots will open.

I think we're calling them pilots, but we're very confident because these are in good cities, good deals have been signed by the developers, demographic studies have been done. By July 15th or mid-July, at least two of them will open, and we're hoping to open close to 28 to 30 screens under this model.

In FY '27

or

over the next year? In

this financial year.

Got it. Just two bookkeeping questions for Gaurav.

One is the CapEx outlook, if you can share a ballpark range for next year. What was the management fee income in FY '26 from the FOCO screens?

Next year, financial year '27, we expect around 375 to 400 crores of overall CapEx, which will be spent across new projects as well as renovation of some of our high-value cinemas. Our management income has seen a sharp increase, even though at an absolute level, it is about close to 10 crores for financial year '26.

On a run rate level, it is at about 13 to 14 crores per annum, and it's growing.

Got it. Thanks so much.

All the best.

Thank you.

Good evening. First question was just to get your sense on the capital-light model.

If you could just help us understand that what is the number that we currently have already in this model? Incrementally, what's the kind of within the 120-screen pipeline, what that number looks like going forward?

That's the first question. The second one was on the rental side.

I've seen that there is some reduction as a rent as a percentage of sales starting to kind of come down as maybe capital-light model kicking in as well as some operating leverage that you're getting on revenue. Just wanted to understand that over a two, three-year period, once this capital-light piece picks up as well, what kind of basis point savings one can think of in this line item, which is your largest OpEx line item?

Thanks.

Gaurav, would you like to answer this?

Sure. Harit, I think we have given that data as part of our investor presentation as well.

In financial year '26, overall we have added about 51 screens under capital-light model, of which 29 were asset-light where developer contribution was and 22 screens were under FOCO model where it was completely franchisee owned and company operated. Overall, I think going forward, we have about 138 screens which are signed under capital-light, of which 52 are under FOCO model and about 86 are under asset-light.

That's one. Second, in terms of going forward, our rental cost, of course, in capital-light model and franchisee model is going to be lower as compared to cinemas where we invest our entire CapEx and that appears in our P&L.

At this stage, it's hard for us to give a guidance on what exact percentage drop that will happen in terms of percentage of revenue, but overall the trend on asset-light will be on the lower side.

Gaurav, just a follow-up is that this 138 number that you mentioned, that gets executed over what period of time?

This will get executed over next 18 months.

Okay. Next 18 months.

All right. Great.

I'll come back for more. Thank you.

Good evening, everyone. Thank you for this opportunity.

My first question is on this asset-light model. I understand the asset-light model helps us in diversifying the risk of content.

What I am trying to understand is now that we have a very neat balance sheet, our constraint on balance sheet is not there. Unless and until we go for a very large number of screens, how is that asset-light model helping us?

Because the way I am seeing is that your screens count is increasing, but your CapEx deployed is decreasing, which will be at this point of time because we have enough resources. Can you just throw a light of what is our objective of doing asset-light model going forward if we have enough resources, if you are generating enough operating cash flows, and we don't have any restrictions because of the balance sheet debt constraints?

Asset-light model and the FOCO model is straightaway your ROCE is improved dramatically. I think beyond a point, if you look at our entire circuit, this we just started about 3 years ago.

Of course, we had some properties under management earlier on, but I think because the brand is now recognized and everywhere, I think sweating the brand is a very natural progression for any brand to do. In the hospitality sector, retail sector, and even in some of the restaurant, F&B sector, this is something which is very common.

You have a healthy balance of growing with your own CapEx as well. At the same time, wherever the opportunity lies to improve your ROCEs, you should be looking at this model as well.

I think even if we have cash flows, it doesn't matter. They have to be deployed on our own expenditure, number one.

Number two, a screen expansion of 120 to 150 screens in a year is quite healthy because we still want to have unit-level economics working both for us and the developers who are spending the money. PVR INOX has been very careful about our screen expansion strategy.

Not for the heck of it, we should just put screens everywhere. Wherever the demographics are correct, market dynamics are correct, where we get a good deal is where we want to grow.

Unit-level economics have to make sense. Given the pace of shopping centers and malls and opportunities in the smaller towns, I think growing by 100-odd screens every year is still pretty healthy.

Gaurav, you'd like to add something more?

No, nothing incrementally, sir.

One just clarification. The unit economics of the screen is not dictated by who funds the CapEx.

Obviously, ROIC at the property level is not going to change because of we putting in asset-light. Obviously, at our balance sheet, it makes a difference.

As long as that unit economics works in a particular catchment area and ROIC is not going to be different because of who funds the CapEx, ideally Under and until, as I said, that mall supply is so high and we can't be catering to all those screens by ourselves, then asset-light makes sense to me. Just a bit more nuances of why we are doing this if we have enough balance sheet is what my original question is.

Gaurav, I'll leave it to you to answer that, please. Yeah.

I think, as Mr. Bijli explained earlier, the strategy is not to use our own capital to open every screen.

I think the idea of the merger that we did 3 years back was to create market leadership, a strong brand that we can leverage vis-a-vis the new screen additions. What we are saying is that our new screens will be a healthy mix of lease model where we will put in our own CapEx, specially in markets where there's high competitive intensity, particularly in South India.

In other markets in the country where we have a good market share and a very strong brand and the competitive intensity is less, we would like to partner with the developers with capital contribution and also do only franchise deals. The whole idea is that we fund our growth through our own internal accruals rather than using CapEx and borrow through debt and grow and make use the strength of our balance sheet to fund the growth for future.

It also helps to improve the return metrics. That's quite visible when we look at the numbers that we've reported in financial year '26.

Okay. What it implies is if we are going to steady-state generate an operating cash flow of north of 700, 800 crores, ideally we should put all this in to the deployment and develop more screens, is what we can expect in a steady-state basis?

Because India is so underpenetrated market in terms of screens, multiplex screens.

It's also a function of supply.

There has to be enough opportunities and unit economics should stack up for that location, for that mall, for a multiplex to be operating. It's a combination of multiple factors.

Screen expansion is not getting compromised because of asset-light and FOCO model. Screen expansion is completely robust.

Wherever there's a good opportunity, we're just utilizing our capital in such a manner where we're being prudent about how to utilize our capital. That's all we're doing.

We're not compromised just because we're doing FOCO and asset-light. It is not compromising on the screen growth strategy.

That continues to remain whatever opportunities which are coming our way, and when we evaluate it and the unit-level economics work, we basically are grabbing on to it. What model we work in is not going to compromise on the screen growth.

The percentage growth we want to increase.

Understood. Thanks for that clarification.

All the best.

Yeah. Thanks for the opportunity, and congrats on the balance sheet improvement.

Just one observation on the balance sheet side. I see that our ROU asset has come down from about 4,900 crores in FY '25 to about 4,600 crores in FY '26.

Correspondingly, we have added about 42-odd screens on a lease basis and about 29 on asset-light basis, which effectively means that there has to be some capitalization on the balance sheet with respect to these screens. Just wanted to know why the ROU figure has come down when we have had screen additions in '26?

ROU assets depreciate over time. Simply because the depreciation over the last 1 year has been more than the gross additions in the ROU on lease model screens, that's why there is a drop in ROU assets because if we add FOCO screens and asset-light screens, the contribution of these screens on ROU assets is much smaller than a fully leased sort of screen additions.

Do we also capitalize FOCO screens? My understanding was that under that model, the P&L belongs to the developer and not us.

We don't capitalize FOCO screens.

Sorry, Gaurav, yeah, you go ahead, please.

Yeah. We don't capitalize FOCO screens on our books.

Okay.

The asset the asset-light model is belongs to the belongs to us. Belongs to the company.

In the asset-light model where there is a developer contribution, the P&L is ours.

Right. Secondly, I just wanted some clarification on the CapEx figure that you mentioned for FY '27.

If I heard you right, you have given a figure of about 375 to 400 crores, and we plan to open about 120 screens in '27 whereby 55% to 60% will be on the FOCO and the asset-light model where typically our CapEx commitment has to be very negligible. Just wanted to understand why this figure is high.

I understand we have renovations as well, which you highlighted in the opening remarks. If you can break this number into new organic CapEx and renovations, it will be really helpful.

Yes. I think roughly around about 225 to 250 crores we will spend on new projects, which will be across payments which are due for projects which are under fit-out, as well as new handovers that we will take during the year.

About 80 to 100 crores will be spent on renovation, and the balance we will spend on maintenance and IT-related CapEx.

Got that. One last question from my side.

In FY '26, we closed about 18 screens, and I believe we have had some closures in FY '25 as well. Just wanted to get some sense.

Have any of these properties that we have vacated, have they been occupied by any of the peers? Can you give some color on that?

Some of the malls themselves were very decrepit and they did not have any potential at all to be revived, because PVR itself started in '97, INOX started in 2000. Some of these malls and leases are all 20 years.

Say 15, 16 years in existence, 20 years in its existence. They've been replaced by newer malls and newer multiplexes in the same demographic by us only.

We've only moved to a better mall, better destination. In certain cases, the malls have been converted into other uses and some malls have closed down.

Some operators have taken it, but from our scheme of things, it did not make sense for us to continue on those properties.

Sir. Thank you so much, and all the best.

Yeah.

Hi, sir, and thanks for taking my question. Sir, I had a broader industry question.

Now this is regarding industry footfalls and occupancy. What I understand is that FY '26 has been a quite a normal year in terms of, let's say, Hollywood coming back, OTT heat normalizing, and we've seen that evidence in terms of direct OTT releases and so on.

Also, overall consumption across the board has been picking up. When I look at our occupancy level of 25.8%, this is very similar to '23, '24 levels.

What gives us the confidence that this is still not the new normal post-COVID and there can still be improvement? I understand content lineup, but quite frankly, there are 1,500, 2,000 releases in a year.

1,500 will be of good quality is the general consensus.

26.2% is what we've closed the year on.

Oh, okay, sir. Still, the question still remains.

Yeah. Every year there are explainable reasons.

This particular year, I think February was not very good. Diwali, which is an aberration, normally you have big Diwali releases, so that didn't happen.

I think we're moving in the right direction of more and more movies coming on the big screen, more and more people preferring to watch it on the big screen than any other format. I see no pessimism or skepticism to think that this occupancies level will not come up.

Secondly, we're looking at occupancy levels at one level, but we're also looking at our costs so that even at say 27%, 28% occupancy, we are able to get the same EBITDA margins that we were getting pre-COVID. Of course, if it does go to 31%, 32% occupancy, then you're bound to get much better margins than even what we were getting pre-COVID because of our cost efficiency that we are achieving post the merger.

Optimism is also coming from the lineup. Optimism is coming from the fact that more and more filmmakers are making film for the big screen, not just in India, but India when I say Hindi, regional, and also Hollywood.

Got it, sir. Is there a evidence now that the OTT heat is now behind and this is the new normal, or there is still some bit of story left there as in there is still a fatigue associated with OTT that might come in future, or that is largely played out?

Oh, it's played out. It was never a substitute.

It only became as substitute during the COVID periods, obviously, when cinemas are shut. It is always something complimentary.

Home entertainment has always been complimentary. TV shows, people watch at home.

When it comes to movies, the first platform where movies are monetized and seen has always been big screen. I think this debate is quite hackneyed and outdated now.

There is enough evidence also about the degrowth of OTT and the growth in people going out and watching movies on the big screen.

Got it, sir. My assessment here is that pick up from here on is more driven by macro factors and not specifically to PVR INOX or the cinema industry as a whole, but more to do with macro factors.

Is that a correct interpretation?

No, cinema very much because cinema is very much in the cultural fabric of our country. Cinema going.

Macro factors can be anything, but I'm specifically talking about the film industry. In the film industry, all the stakeholders, which are the filmmakers, the OTT platforms, the consumers, the mall developers, everybody is now making way for theatrical.

I think the fundamentals of business have always been strong. That's the reason why the growth in box office numbers are there.

This year, the 13,395, whatever, calendar year has been the highest ever. Also it's not just a passive brand.

It's a very active brand. We have got the best locations in the country.

We are proactively doing so many marketing activities to make sure people come to our cinemas. PVR does get a delta over any other operator, any other cinema chain, because of the way we position ourselves.

I think it is not just macro. It is a lot of proactive effort that PVR INOX makes, and also because of the way the film industry is currently poised.

The fact that movies are doing so well at the box office, that fact is not lost out on any of the filmmakers because there is no cap to how much a movie can earn when it gets released on the big screen. Smaller movies like Saiyaan, Mahavatar Narsimha, Laajo, all these movies were small to medium budget movies.

Look at the box office collections they have got.

Got it, sir. That's all from me.

Thanks again, and all the best. Yeah.

Yeah. Hi, sir.

Thanks a lot for giving me opportunity, and thanks a lot for a very good performance. I would like to ask that, see, fundamentally speaking, our stock is completely undervalued.

Now, of course, as you rightly said, the trend is changing. From last 6 months, we are seeing good footfalls.

Now you are generating so much of operating cash flow, and your CapEx is limited. Why would you not consider a buyback?

Because if you remember, during COVID also you did a QIP at around about ₹1,300, and still the stock price is below that even after such successful movies. You are saying that pipeline is also looking very robust.

Why a buyback where promoter will not participate is not an option as a capital allocation decision now that your net debt is just 160 crores?

Gaurav?

Sure. Mr.

Thakkar, I think we have been on the journey of deleveraging over the course of last two, three years. As you've seen, our net debt levels have come down by almost 90% since the merger time, and we are now negligible net debt.

I think the first objective for the company is to become a positive net cash, which is looking very likely in the near future. I think once that is achieved under the guidance and discussions with the board members and we will also discuss the capital allocation priorities and objectives of the company post that.

At this stage, yes, it is definitely one of the things which is there in the list. At this stage, we don't have any incremental guidance to offer.

Sir. It is my genuine request that once you are net cash, I think because the stock is completely undervalued based on the fundamentals, and of course, the stock has not rewarded shareholders because of the reasons which were not in your hand.

Now that the tide is turning, I would seriously recommend that we should go for a buyback.

Sure. Thank you so much.

Point well noted. As

I said, nothing is off the table.

Thanks. Thanks.

Thanks.

Hi, team. Thanks for the opportunity, and congratulations on a good set of numbers.

Your initial capital-light screens are now almost 8, 10 months old. How would you assess the progress on this initiative so far across both the FOCO and asset-light models?

What have been the key learnings, positives, challenges, or areas where further improvement is required? Could you also quantify the margins you're generating on such screens today?

Yeah. Gaurav, can you answer that, yeah, if you have the numbers?

Sure. I think we have had very strong response on both franchisee as well as asset-light models.

On the franchisee screens, there has been a very strong response, specially in tier two and tier three towns. A lot of cinemas that we have opened in the recent past, for example, in Siliguri, Gangtok, Agra, Leh, they have been all franchisee deals.

The performance has been pretty strong. The response from the local partner that we have given the franchisee to has been satisfied.

The overall growth in the management fee on a run rate basis has been upwards of 40% to 50%, even though on an absolute basis, it is still a small portion of our total top line because we have almost 17 50 to 1,800 screens on the lease basis. Asset-light, which is where we partner with the developer, where developer contributes anywhere between 40% to 80% of the CapEx.

Again, there are a few cinemas we've opened in the last one year under that model. We are yet to see one full year of operations.

Far, I think the earliest one that we opened was last year sometime in the month of April and May, and which has completed one full year of operations. The performance has been pretty healthy.

ROCEs are in line with what we had estimated at the time of feasibility of those cinemas. As we open more cinemas under asset-light approach, we will also learn about how they are performing and overall response from the developer partners there.

Got it. On the expansion plan, 75 net screens added this year.

What is the plan for FY '27 in terms of gross additions? Would it be around 100, 120?

Apologies if I missed this number earlier.

That's right. Yeah.

Our screen

expansion will be continuing to be over 100 screens. Some will be through this model of FOCO and asset-light.

We will be spending our own money. There a lot of focus on tier two, tier three sort of cities as well with our smart cinema initiative, I think the first one will open by mid-July.

We're expanding in those smaller towns as well. Of course, big cities continue to surprise us because the CBD keeps changing.

Newer malls, newer shopping centers continue to come in cities like Bangalore, Bombay, Hyderabad, Chandigarh, Kolkata, Surat. Big developers like Phoenix, Prestige, DLF, Oberoi Realty, Nexus Malls, they continue to expand into various regions and various cities.

We are very much their preferred partner with all of the top developers in the country today. They're continuing to have shopping centers and having spaces allocated for cinemas.

Sure. On our CapEx basis, on on on the CapEx front, what would be the average CapEx per screen on the smart screen model, the one that you plan to ramp up in tier two, tier three?

Gaurav, will you give the comparison between normal screen and

Yeah. Roughly, for smart screens that we want to open up in tier two, tier three locations, the offering will be more affordable both in terms of CapEx and more cost-efficient in terms of operations.

We expect that our per-screen CapEx for a smart screen will be at least 30% to 40% lower than mainstream cinema in that same location. Depending on where we open, it'll be about 30% to 40% lower.

Got it. Last question on the debt position.

A stellar debt reduction over the full year. From here on, what is the thought process on gross debt?

You have a cash balance of about 6 billion, gross debt of about 7.5. Do you plan to pare it gradually while holding on to cash, or will there be accelerated payments on the gross debt front?

Of course, as you mentioned, dividends could be considered at some point in the future. What is the intended use of cash here with respect to debt?

I think in the near term, we will use it to further bring down our gross debt. Our gross debt as of 31st March is around 760 crores, and we intend to bring it down to about 500 crore levels.

In the last year, we've prepaid a lot of our term loans. We will continue to prepay some of the term loans, and some loans with the flux of time will get reduced.

We want to bring it down to about 500 crore levels at a gross debt. Then

net debt coming down to zero is a possibility by say 1H FY '27?

Yes. While I would not like to comment on the exact timelines, but in near term it's definitely on the horizon.

Sure. Thank you so much, and all the best.

Thank you.

Thank you.

Hi. Congratulations on the great set of numbers.

I wanted to understand some unit economics on the new model. For say the FOCO model, we are not contributing on the CapEx side.

On the console basis, we are not even adding the top line in our revenue, original top line. What exactly do we combine in our P&L?

The management fee, and is that on a fixed basis or what is the proportion? Secondly, same on the asset-light structure, for say they are contributing 50%, do we add the entire into the ROU asset and then what do we book in the P&L?

Wanted to understand on this part.

Sure. On the FOCO model, we only book the management fee.

We don't consolidate the P&L of the property. The P&L is retained by the landlord.

The management fee varies between 10% to 14% of the top line of the cinema. That's how we record the financials in our books.

On the asset-light model where there is a contribution coming from the landlord anywhere between 40% to 80% of the overall cinema CapEx, depending on how much the developer contributes, we work out arrangement of yield on his investment. The balance CapEx which comes to our account, which is, let's say 40%, 50%, is something that we capitalize in our books and gets recorded as ROU assets and lease liabilities.

The entire P&L is consolidated. The yield that we pay is in the form of rentals and appears as a rental expense in our P&L.

Perfect. Another thing, just confirm if I'm right, on the FOCO side, if you're not adding incremental CapEx and getting a fixed top line of their revenue, their share, and so this is the way we improve our ROCE going forward, right?

Sorry, I missed your last part of the question. Can you repeat it?

If we are not contributing CapEx on the FOCO side and we are getting top line added to our revenue, their share, and so this is the way our ROCE improves going forward, right?

The management fee gets recorded in our P&L. If let's say this year, for example, we have added about close to 18 or 19 FOCO screens.

We just get management fee in our P&L. Incrementally, whatever FOCO we add, the revenues are recorded.

There is no cost to it.

We do operate, there is some employee cost incurred by PVR on these screens?

No, no, no. No, as I explained earlier, the P&L is with the landlord.

Yeah. Okay.

We incur no expense on the FOCO screens?

No,

not CapEx, not OpEx. No.

Thank you.

Thank you all for joining this management earnings call for quarter four and FY '26. If you have any further questions, you may reach out to me or my colleagues in the investor relations department.

Thank you once again for joining this call.

Thanks.