INOX Leisure Limited (PVRINOX) Earnings Call Transcript & Summary

Ladies and gentlemen. Good day, and welcome to the post-PVR, INOX merger call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Periwal from Axis Capital. Thank you, and over to you.

Thank you, Yashashri. Good evening, friends, and welcome to PVR, INOX Limited post-merger conference call. The call will be initiated with a brief discussion by the combined management of PVR, INOX on the merger, followed by an interactive Q&A session. Management team will be represented by Mr. Ajay Bijli, Managing Director, PVR Limited; Mr. Sanjeev Kumar, Executive Director, PVR Limited; Mr. Nitin Sood, Group CFO, PVR Limited; and other members of the senior management team. Over to you, Mr. Bijli for your initial comments.

Thanks very much. Good afternoon, and welcome, everyone, to our analyst investor call. I'm delighted to update that we have successfully completed all formalities relating to the merger of INOX and PVR within record time line. The new PVR shares issued to INOX shareholders have already started trading from yesterday. The coming together of PVR and INOX brands marks an exciting chapter in our journey and create the largest film exhibition company in India with 1,674 screens across 358 properties in 114 cities [ India and Sri Lanka ] and an aggregate seating capacity of 3.56 lakh seats. We are confident that this merger will allow us to better serve our customers, expand our reach and create new opportunities for growth. Moving forward, as the appointed date is fixed as 1st January 2023, we will be reporting combined financials along with the audited results of Q4 FY '23. Our focus for the next few months will be to successfully integrate the 2 businesses and realize the anticipated merger synergies over a 12 to 24-months' time frame. This will require a lot of hard work and dedication but we're excited about the opportunities that lie ahead. We've engaged [ Korn Ferry ], a leading HR consultancy firm in assisting us with the HR and cultural integration. We've announced [ at day 1 ] organization structure. I will lead the company as a Managing Director and Mr. Sanjeev Kumar, my brother, has been appointed as the Executive Director. We will be supported by the following leadership teams from both PVR and INOX. Mr. Alok Tandon, Co-CEO, Central, East and West Regions; Mr. Gautam Dutta, Co-CEO, North and Southern region; Mr. Nitin Sood, Group CFO; Mr. Kailash Gupta, Deputy CFO, PVR Limited, and CFO, PVR Pictures; Mr. Kamal Gianchandani, Chief Business Planning and Strategy Officer, PVR Limited, and CEO of PVR Pictures; Mr. Pramod Arora, Group Chief of Growth and Business Development; Mr. Renaud Palliere, CEO, the Luxury Collection; Mr. Jitender Verma, Chief Information Officer; Mr. Rajender Singh Jyala, Chief Programming Officer. Moving on to the content side. We recognize that 2023 was -- '22 was impacted on account of underperformance of Hindi films and lower number of Bollywood film releases. Last year, the Hindi film industry experienced a turbulent year with significant fluctuations in box office collections. The focus has shifted towards the content quality rather than solely relying on presence of stars. There's now greater acceptance of multi-language content with pan-India releases and multiple languages becoming the norm. This trend is a positive development for the industry as it opens up new markets and audiences while also encouraging filmmakers to prioritize content quality. The lineup for 2023 is looking very promising. We have big release slate for the next 12 months across Hindi, English and regional films. After the -- from Hindi after huge success of Pathaan, we have 2 more movies starring Shah Rukh Khan releasing this year, Jawan releasing in June and Rajkumar Hirani's Dunki releasing on December 23. There are 2 big movie starring Salman Khan, Kisi Ka Bhai Kisi Ki Jaan in April, and Tiger 3 in November. We have 2 Ajay Devgn movies, Bholaa in March '23, and Maidaan in May '23. Other big movies from Bollywood include Bawaal starring Varun Dhawan in April '23. Adipurush starring Prabhas and Saif Ali Khan in June '23. Satyaprem Ki Katha starring Kartik Aaryan and Kiara Advani in June '23. Dream Girl 2 starring Ayushmann Khurrana, June '23. Yodha starring Sidharth Malhotra in July '23. And Animal starring Ranbir Kapoor in August '23. From Hollywood, there as several [ tenfold ] planned for release. 2 movies from the Marvel Comic Universe, Guardians of the Galaxy Volume 3 in May '23 and The Marvels in July '23. 3 movies from the DC Comic Universe, Shazam: the Fury of Gods in March, The Flash in June, and Aquaman and the Lost Kingdom in December. We have sequenced some super-hit franchises like Fast and the Furious 10 in May; Transformers: Rise of the Beasts in June; Indiana Jones and the Dial of Destiny in June; Mission Impossible - Dead Reckoning Part One, July '23; and Dune 2 in November. Other notable releases include Christopher Nolan's, Oppenheimer in July. Regional cinema too had some strong releases. Jailer, Rajinikanth, in April. Bhola Shankar starring Chiranjeevi in April. Salaar starring Prabhas in September. PS2 in September. Leo starring Vijay Thalapathy in October. Indian 2 starring Kamal Haasan in October amongst others that will get released during the year. Looking ahead, we will be opening 180 to 200 screens every year over the next 2 years across strategic locations in key markets. We are confident that PVR, INOX will continue to grow, innovate and reimagine the movie-going experience to make our brand aspirational and accessible. We believe that the future is incredibly bright, and we look forward to sharing our progress with you over the coming months and years. Thank you once again for joining us today.

Should we begin with the question-and-answer session?

Yes, you can begin with the [indiscernible].

[Operator Instructions] We have a first question from the line of Abneesh Roy from Nuvama Institutional Equities.

Congrats finally on the full merger. My first question is on the SPH wherein you have highlighted that in India, you are still at 51% versus global average is 70%. You have already been doing very productive work here. Going ahead, what can be the differentiated factor here? I understand the [indiscernible] bit, I understand the home delivery bit. My question was more on the home delivery and the pre-ticketing, how big is the opportunity? Because you have given the data versus the rest of the QSR. A lot of your consumption here is because of the captive audience. So beyond your captive audience, how big is the opportunity? Because your pricing versus a normal Zomato offering or [ Swiggy ] offering, the pricing is a big challenge, right? So are you doing some proactive work in terms of the pricing bit in the home delivery?

So actually, there is.

Gautam, [indiscernible] to answer that?

Yes. So see, this idea came up during COVID and we've actually worked extensively to get a new menu, a new brand on Zomato and Swiggy, which actually in terms of pricing was extremely price -- market competitive. So we are not selling the SMB product at the cinema pricing, but it is very, very competitive with that. Having said that, this merger sort of gives a much larger footprint to this idea. Now we can actually try this experiment across many more locations. And these are kind of early days. We are also learning this new way of doing SMB business. This is great incremental food business for the cinema but it will take some time for us to make it more sizable as an independent entity. But more locations means more delivery and being able to sort of feed a larger consumer base.

No. But my question was -- yes, sorry.

Abneesh, go ahead, please.

So my follow-up question there was, say, internally, I'm sure now with merger done. Would you have a number internally that okay, 3-years, 5-years down the line, home delivery bit or whatever you mentioned of a separate brand with a much more affordable pricing. Do you have a number on that, at least internally, that this percentage of F&B revenue has to come from there? And are you doing, for example, cloud kitchens in a big way? Or is it being largely done through your own stores currently?

So it's currently all being driven out of our cinema. We've taken an outside view that technically 5% of the SPH contribution should eventually come from such an initiative. But as I said, this is going to be a couple of years down the line that when we can get there. But to your point, did we take a target? Yes, there was and for each cinema. And we've got not one location technically in a certain location. So every 5 kilometers, there could be a cinema and every cinema would possibly have a micro target where we will like to contribute at least 5% of the cinema SPH coming out of a home delivery. But as I said, these are early days, and we are kind of consolidating and learning as we are moving forward on this.

Sir, my last question on the F&B aspect is, you have a 20% gap or 19% gap versus the global average. If you see general customer perception is that already popcorn and Cola and all products in your multiplex is quite expensive. And you already selecting the current real estate within the multiplex is quite well. How does that gap bridge? Is this gap more because of the per capita income what India has? So whenever that per capita income goes up, then this gap can be bridged because this gap is a big gap, right? The [ 17% ] of ATP is the international average.

But that's a positive isn't it. It shows you that there is headroom to grow. And so it will be delivered by volume rather than value. We still believe we can improve the strike rates. We still believe that we can improve the variety of offerings. We're also looking at not necessarily selling everything post ticketed. We're also looking at pre-ticketed. Now that pre-ticketed doesn't mean only home delivery, pre-ticketed also means that you can enter the premises and buy concessions. A lot of our cinemas don't allow entry unless you have a ticket. Now we are planning to open up a lot of cinemas as well so that even people who have not come to watch a movie, they can also buy some of our [ USP ] products. So there's a lot of strategies that we have in mind. Some of the box offices are getting converted because a lot of tickets are getting sold online now. So a lot of real estate is dedicated to box offices. We don't need such large box offices. So some of them are getting converted to -- we've already done those pilots. In Ambience, Gurgaon also we've done it, where the concession stand is also opening outside and some of the box offices are converted into F&B outlets. So I think there's a lot of initiatives being taken to take this up further.

Sir, my last question is essentially on the cost and CapEx bit. You mentioned CapEx will come down by 10% to 15%. Wanted to understand that, is it just because of economies of scale because already PVR itself was very large, right? INOX is adding more to that, but still I want to understand that bit. And second is EBITDA synergy of INR 225 crores. What are the low-hanging fruits here? You have mentioned 12 to 24 months, and you mentioned 3, 4 factors, which will drive this. What are the low-hanging fruits here in terms of [ ticker ] turnaround?

Nitin, do you want to talk about the low-hanging fruits?

So Abneesh, like you said, working -- we started work on the synergies very recently. The teams have started to get together. I think the big focus area will be to drive the revenue synergies. SMB is going to be one of our large areas where I think the focus is going to be to drive long-term synergies. There is a difference in the SPH levels between both the circuits, how do we bridge that? That's going to be the big focus area. Obviously, box office, synchronization of programming across common circuits where we have cinemas for both PVR and INOX. How do we synchronize programming to ensure that we have shows which are complementary, which gives opportunity to consumers to watch a film every 20 minutes instead of competing on showtimes? How do we ensure we synchronize pricing, not compete in some of those common circuits and advertising revenue? I think these 3 big revenue [ tickers ] are going to be there. I think on the cost side, our big focus is going to be supply chain. I think both the teams have done a lot of work on cutting down their independent cost during the pandemic. So from here on, I think the focus will be to get supply chain synergies given the size and scale and the volume. SMB COGS -- reduction of SMB COGS given the significant volume of buying that we will do. Any duplicate overheads which we can immediately rationalize will be the quick wins. Balance of the stuff will take some time. We will also -- that's the reason we've guided about a 12 to 24 months of effort before we realize the full potential synergies. But hopefully, later part of the year, we should start seeing some of the synergies playing out.

We have a next question from the line of Jinesh Joshi from Prabhudas Lilladher.

Sir, I have a question on the cost synergy bit which you just highlighted recently. So in terms of avoiding a duplication of work, which you just mentioned, what [indiscernible] areas have we identified? Maybe we may not need [indiscernible] for programming or for that matter, even for negotiating with the mall owners. So basically, any specific area that you would want to highlight over here which can result in a decent amount of savings due to employee redundancy?

No, not really. We wouldn't want to highlight. We started work. I think it will require a great amount of organizational effort between both the companies to integrate both the organizations. I think for us, that's going to be the big priority right now, integrating. We both operate on different technology platforms, different ERPs, different operating systems. So I think next 6 to 9-month effort will be to try and integrate and put everything on a common platform. Post which some of the synergy integration will play out faster. No specific guidance on any specific area as such. I think we started work. I think we believe there will be savings in each element of cost. But it's slightly premature for us to comment on anything specific right now.

Sure. But will the benefit be front-loaded in year 1? Or will it take some time to realize, that's the follow-up? And secondly, also, I would like to know when does our term with BMS and Paytm end and also for INOX? And secondly, with respect to that, unless that term ends, there will be no [ upside ] from fresh negotiations, right?

Sorry, I'm not able to hear you clearly. Your voice is breaking in between.

So what I was saying is that will the benefit accrual for synergies will be front-loaded in year 1 or year 2, that is one. And secondly, I also wanted to know when does our term end with BMS and Paytm and also for INOX.

Okay. So on question number one, like I guided earlier, we think it will be a 12 to 24-month effort to realize the synergies. No, I don't think there will be front-loading of the synergies. It will take minimum 5 to 6 months of work before synergies start reflecting in. So yes, there will be some part of the synergy of the [ INR 225 crores ] annual synergies that we've guided, which will flow in year 1, but exactly what that quantum will be, I think as we go along during the year, we'll be in a better position to guide. But some of these synergies will move into next year. As I said, we -- there is 6 to 8 months of work involved in putting a lot of stuff on the ground in actionable condition before the synergies start reflecting. On your second question on the -- our contracts with online aggregators, PVR's existing contract ends in end of April and INOX's existing contract ends end of March -- end of March 2024, sorry.

We have a next question from the line of Arun Prasath from [ Spark ].

Some of the questions on the quantification of the synergy I think was covered already. I would like to focus on some of the qualitative aspects of the synergy like probably, today, we are not able to quantify it, but it will generally give us a positive EBITDA probably over 5 to 6 years. What are those things which is currently we are not quantified, but something which we are working? If you can highlight it -- some of that, it will be great.

I didn't get your question fully. Can you again -- once again -- because when you say qualitative aspects of the integration?

Of the synergy benefits. Basically, we have quantified some of the things which we can quantify, probably we have done it. For example, I don't want to say example, but to put it in a word, say, extension of the OTT windows or some of the things that probably can do with the mall developers. Anything else apart from this, which you can know, which is a long-term kind of merger synergies that we should be aware of?

Yes, I think the focus will be with the combined size and scale to work on all areas to improve the operating efficiency of the circuit that we have and that would -- relook at some of the existing contracts, et cetera, and practices we have. It will also include relooking at our CapEx outlook in terms of average per screen spend, it will also look at figuring out a way to better manage our rental costs, try to make more and more variable costs and reducing intense -- CapEx intensity in the business as we move to more Tier 2, Tier 3 locations. So all of that will be part of the long-term strategy and the plan. But like I said, it's still early days. We will be working on a lot of it. And maybe in next 3 to 6 months, we will be in a better position to share a lot more as we work together on the combined entity.

Actually, specifically, I would like to ask something on the OTT window. Is there any -- beyond a certain days or peaks, is the benefit of extending the window is there or it stops at certain level, say, 6 weeks, 9 weeks or 3 months. What is our current read on this?

Our current window for Hindi films, which is predominantly our -- which is predominantly the content that we play in our theaters is 8 weeks. This is the same as the window that used to exist pre-COVID. Currently, both content creators and exhibitors, which is PVR, INOX, we are comfortable with this window. The same window applies to Hollywood films. In fact, the Hollywood films, the window tends to be a bit longer because the Hollywood films come from the studios mainly and these studios tend to follow the international windows, which are usually longer than 8 weeks. As far as regional films are concerned, the other non-Hindi Indian films, Tamil, Telugu, Malayalam, [ Kannada ], Marathi, Punjabi. We play films in almost 12 languages. Windows vary from 4 to 6 weeks. It's our endeavor to push these windows towards 8 weeks. But we would not like to make any sort of firm -- we'll not like to make a firm specific window, spell out the firm specific window at this stage. But the endeavor for this year remains that we would want to sort of increase the windows for the non-Hindi Indian languages.

Okay. Actually, I was asking specifically beyond 8 weeks, is there any benefit or you don't tend to see any benefit on the [indiscernible] occupancy in your multiplexes.

It's a bit of a subjective issue. And for different films, the answer would be different. But for bigger films, which show longer legs at the box office, yes, the longer window is definitely beneficial, but you have to appreciate it's beneficial to both parties, right? Even the content creators benefit from a longer run, if a film is having a long run at the box office. So therefore, quite often we find that the content creator is more than comfortable to increase the window for a big film, especially the ones which are doing well at the box office. So yes, the answer is, yes, we benefit from a longer window, especially for bigger films, but more often than not it's the content creator who's forthcoming with a longer window.

But can the content producer change it after the release [indiscernible] release? Isn't it already agreed between the OTT before the release itself regarding the window?

Yes, they can. The content creators tend to have considerable leverage with the streaming platforms. And in a counterintuitive fashion, even the streaming platforms benefit from a longer runoff of a film at the box office. So quite often, even they are comfortable to increase the window.

Okay. Understood. Okay. My second question is on the -- now that we have a stronger balance sheet, do we -- are we thinking of anything about smoothening the volatility on account of -- depending on this content, can we do something related to reducing the volatility -- content volatility?

No. We are constantly in dialogue with our content partners requesting them, informing them of our trends and various data points that we are monitoring and collecting to ensure that content creators take more [indiscernible] theaters, and they also continue to release them in a steady fashion. So there is a constant dialogue on this front. As far as volatility of performance is concerned, our business, the inherent DNA of our business is peaks and valleys. So while we, as exhibitors and content creators, producer, distributors, all of us want more consistency. But the fact remains that this is not a business that we can see on a week-to-week basis, we have to see it on a slightly longer duration. But our experience has been that when you see it for a slightly longer duration, things tend to even out.

[Operator Instructions] We have a next question from the line of Girish Pai from Nirmal Bang Equities.

This number of 180 to 200 screens seems a fairly large number considering the low occupancy levels we've had in the last 9 to 12 months. Do you think the new screens are cannibalizing your older screens and do you think you can work with a slightly lower number of new screen openings? Just before you kind of go more aggressive on that -- before you kind of -- I mean, to see that your occupancy hits a certain decent number of 35-plus thereabouts, which you did achieve in the past?

See, it's only been -- it's only been 12 months since we have opened after COVID. So it's too early to take these occupancies as a normal settled occupancies with this business and what we've been attracting over a period of time. And these decisions have been taken where it takes about 4 to 5 years for a 3 years minimum, maximum 5 years for a mall to come up. So these decisions were taken earlier. Plus all the projects that we sign and the screen that we open are very carefully selected in terms of what are the market gaps where a product like PVR or INOX is not there, which are the malls, which are being developed by quality developers like Phoenix or DLF or Lulu or Prestige. And these are all destination malls in catchments and cities where there is no presence of high-quality cinema experience. But this 12-month is too short a period for us to start having palpitations about our business. It's -- we are comparing 80 years of pre-COVID period to 12 months of post-COVID period, it's too early to draw any conclusions. We believe in the long-term prospects of this business. And we believe that all these screens are in great locations. Quite a few of them are in South India as well. In fact, the ones that we've opened quite -- a bulk of them are in South India as well, where, again, the multiplex penetration is very low. Still, there are a lot of single screens there, but now mall developers, building shopping centers and malls and a lot of these towns in South India as well and that's where PVR or INOX becomes an integral part of attracting footfall. So these are -- this is not just CapEx being done without any thought. Each and every property has a return criteria. Each and every property has a qualitative criteria before we start investing capital. Plus also these projects have got bunched up together because for a long time, the activity has stopped. And now ever since the world has opened up, the malls and shopping center construction has also expedited. New retail formats are coming up. Existing retailers are increasing their footprints in the malls and new brands are coming up every day in the country. And so in fact, the footfalls are increasing in all the malls as well. Off-line sales are better than online sales now. So PVR is very much -- PVR and INOX are pretty much part of this upward trend in the shopping center development.

Okay. My next question has to do with the synergies. It's interesting that you mentioned that F&B would be the key 1 to focus on. I thought probably advertising would be the easier one to kind of an easier win to get, because there's a fairly large differential between the INOX leisure worthwhile INOX Leisure ad revenue per screen versus the PVR ad revenue per screen. So wouldn't that be an easier win for you to get compared to F&B?

I'll let Gautam answer that. Gautam?

So actually, advertising, definitely a lot of work needs to be done. And we are very, very confident that coming together of PVR and INOX is going to really open up the market for us. There is definitely some amounts of low lying fruits in terms of price correction and discounting correction that could happen. But having said that, we are just waiting for a couple of movies back-to-back to start doing well. We've got a lot of advertisers back during Pathaan and now with Ranbir Kapoor film. Even South has seen an influx of all the large advertisers coming back. They are now definitely showing interest. I think the journey of getting synergy numbers is definitely on the cards. And I believe within the next quarter or so, these synergies would start trickling in, but it will be largely the H2 of this year where we'll be able to start scratching the surface and getting ready for the big bang numbers.

Okay. My last question is to do with the per screen fixed cost structure. How do you foresee that going forward? In which particular spend/head do you see costs kind of coming down on a per screen basis?

It's too early for us to say a comment on anything. I think at this stage, like I said, bulk of the savings, if any, will be on removing duplicate costs and getting the supply chain benefits. At cinema level, I don't think there is any material difference in our cost structure. But I think in corporate and regional costs as we integrate the organizations, there will be some savings. But the big focus area right now, I think in the next 9 months is to integrate the organizations right, given the complexity involved, and the synergies will follow post that.

Okay. And one last question, if I can squeeze it in. Any specific item on the balance sheet, which comes out as an adjustment or some extraordinary items, which one should be aware of, post the merger?

On the balance sheet?

Yes, right. Is there any goodwill or...

[ Sanction ] related costs, there will be some [ same ] duty cost, which will be one-off, which is relating to the transaction, nothing else other than that. I think both the organizations have been running. And we will -- as we announce the numbers for this quarter, obviously, there will be synchronization of accounting policies, restatement of some of the balance sheet items to bring them to common accounting principles. That's about it, which is required, which is typically a part of any merger exercise, but nothing other than that.

We have our next question from the line of Aliasgar Shakir from Motilal Oswal.

I had a question on our occupancy. So in the last couple of quarters, we noticed that discretionary spends across multiple states have been pretty big. Do you think that would be a reason because of which our occupancies may have got impacted. Now I understand that some of the movies have done very well. But then maybe frequency of the footfall is what maybe gets impacted probably, and therefore, it gets bunched up in to specific movies that do very well. So any thoughts on particular states that may have done well or not done, if you could share any color through your surveys that you may have done.

Generally, it said about the entertainment business that this is a recession to Ticketpro business. And we genuinely believe that, that statement is true because when we look at -- we have this one property in Sri Lanka and Sri Lanka is the known factors gone through some serious financial crisis. But the numbers that we've seen in the calendar year 2022 have been the best numbers that we've had in Sri Lanka property, although it also opened in 2019, so there is not much of Phase III. But what I'm trying to say is that, in spite of a very deep rooted financial crisis, Cinema has continued to perform in a fantastic fashion. In India, I think the problem has been more to do with the number of Hollywood films. There was a reduction in quantity. And definitely, there was a decline in the performance of Hindi films, which is staple diet as far as pan-India national chains like PVR INOX are concerned. Also, the mid-level films, films which were doing INR 50 crores, INR 60 crores of box office, they showed underwhelming performance. But like I mentioned earlier, our business has seen these sort of phases earlier, and also, let's not forget that COVID was one of the biggest break in this habit of movie-going, cinema-going that we've had in this country or anywhere else in the world, and cinema-going is a habit. I mean bulk of our business comes from people who come back to theaters frequently, watch a lot of films in a year. As a result of this break, we've seen some disruption in Hindi films as far as this year is concerned, also some bit of disruption in the mid segment films. But we also believe that the bounce back will be very sharp. And the reason I'm saying that is that when you look at the Hollywood situation, when you look at the North America box office, the films which have released this year, and I'm referring to the mid-segment films like Puss in the Boots, which is an animation film; Creed III which came out recently; M3GAN, which came out recently, another horror film; A Man Called Otto, which is a very small specialty film, almost like an arthouse film; Cocaine Bear, which has no star cast to boost off; Scream VI, which came out this last Friday, and it's turned out to be the biggest screen in the entire franchise. Like pre-COVID this is the sixth Scream, and this is the best outing Scream series franchises that. So the resurgence in the box office, especially in these mid-level films. The big -- the techno films like Avatar and the similar category of Marvel Films or DC Films, they were doing better in any case, but it's the mid-level films that was suffering because of this break in the habit. But those films are coming back in a very, very sharp manner in the North American market. We believe our market is right for its similar resurgence. It's a matter of time when you would start seeing a jump in occupancy as far as the mid-level terms are concerned as well as the Hindi films are concerned. And also, the quantity of Bollywood films is slated for an increase later this year. So we don't believe it's the discretionary spend because our business traditionally has improved -- has been recession-proof. We believe the business will continue to be recession-proof. In fact, if anything, it will grow more in times when there is some sort of a financial crisis, people would need more escapism. People will tend to go out more with their families and friends. So yes, that's what we would like to share.

[Operator Instructions] We have our next question from the line of Pulkit Chawla from Emkay Global.

So first, on the screen expansion plans, how are you currently looking at adding screens in metro cities versus say Tier 2 or Tier 3 cities? And is there some preference for some particular region as well, like you mentioned the South? Second, I think with the merger now complete, will you be looking to get more aggressive in PVR Pictures with a larger reach in -- for you now?

Yes. I mean out of the 200 screens that we are looking at opening up this year, 44% are in the metros and actually majority of them are in the South. I think about 30%, 35% or 40% almost in the Southern region where the business remains robust in Tamil Nadu, Karnataka, Andhra, Telangana and Kerala. There the business still remains very robust, regional movies are doing well. There's a lot of focus off-screen addition in the Southern region. In Tier 1, we have about 38% screens coming up and between Tier 2 and Tier 3, about 17-odd percent screens are coming up. Of course, between both PVR and INOX expansion, we're also looking at some new cities that have yet not had a multiplex experience. It's -- India is a very large country and underscreened country, and we are looking at places like Patna, we're opening sometime soon, Ajmer, and some very small places in South India also, like Tirupur and Machilipatnam, where there is -- these are the places which are yet to see a retail and a multiplex revolution. So these are some new places, both in South and other parts of the country where we're also focusing on screen expansion. And the second part was PVR Pictures. We are getting some good opportunities for PVR Pictures also. We are looking at scaling up both our English and Hindi and even regional business. English films, of course, we sub-distributed, Everything Everywhere All at Once and The Whale, which won the Oscar's yesterday. We have a lineup of [indiscernible] systems for the whole year, releasing John Wick on the 24th of March, which is a very big franchise amongst many other English films on an average. We release at least 1 film, every 2 weeks. Hindi films, we've had a big hit in November with Drishyam 2, which is a hit in all-India box office about INR 250 crores. And [ withholding ] that up now in March, end of March, 30th March, we have Bholaa with Ajay Devgn once again. And we are in talks with various other producers, Hindi and regional for authenting us a local film distribution business as well. So there are a lot of opportunities coming our way.

We have a next question from the line of Preet Malde from Centra Advisors LLP.

So the approach of INOX and PVR has been different historically when it comes to opening up new properties. INOX has more or less refrained from paying a high premium for premium properties and PVR has not, if we look at it historically. So how will our approach be from now on when we'll start operating as a singular brand?

That's not entirely true, I think in the INOX portfolio also because there's been a lot of premium of things and charters like Insignia. There's an Insignia in Mumbai in Nariman Point, Metro Cinemas is very premium. In Gurgaon, there is Insignia which is very premium. So I think both companies have had a mixed bag of products and cinema classification. And going forward, I think we're looking at each and every city, generally catchment redundancy, the mall specifications where we are halt, the catchments around that mall, and then, therefore, looking at decisions of premiumization versus making the mainstream cinema. But I think by and large, we are looking at providing a very good, high standard of cinema regardless of whether it's Insignia format or Luxe format, [indiscernible] super luxury format. We're looking at providing a very good high standard of cinema both in terms of interior and exterior. And we have many formats also IMAX 4DX, MX4D, Playhouse and Dolby, which we're looking at deploying at various cinemas across the country current and upcoming as well in order to make the experience as good and as comfortable as possible for the patrons.

I think you just misunderstood my question. I was not talking about premium viewing experiences. But all in all, properties that attract a higher footfall. PVR is ready to pay a higher premium for such properties, and INOX as usually refrained from it. And if we look at it by EV per screen perspective, we can see the difference. So how will our approach be from now? And that's what I'm asking.

Okay. No, sorry. I mean, I think, again, going back, there were some properties by INOX also that are slightly higher premium fee. And going forward, we have a very robust pipeline now actually. We already have about 160-odd streams under fit-out and going forward also we have 150, 160 odd-screens that we'll be taking for handover sometime soon in Q2 of next year. And I think the market has found this [indiscernible] level, so to speak now. And going forward, we are getting better yields and better developments to vis-a-vis multiplexes in -- at just market rates and reasonable rates and nothing which is too high or too premium. Because I think the developers also realize that they want a good product and a premium product for their malls. And we're providing that and providing the portfolio required to mitigate the mall.

Okay. And the new screens that will be starting, how will they be branded? Will it be brand as INOX PVR or a specific INOX or PVR or PVR-INOX combined brand?

So I think as of now, all the pipeline that we are executing over the next 6 months, because this is already under fit out, will open on an assess basis. PVR screens will open as PVR, INOX screen will open as INOX. I think it is a new handover that we will take now, which will open 6, 9 months later, there we will have the question of rebranding coming into play. I think we are deliberating on that. The going-in position was to brand everything as PVR INOX. That's what we had announced when we did the merger. But to be honest, we need to think through the brand strategy as we go along. But at least in the near term, next 6 months, whatever is opening will open as is with the existing branding.

As there are no further questions, I would now like to hand the conference over to management for closing comments. Over to you.

Thank you. I just wanted to thank you for taking out time for the call. And if you have any follow-up questions, you can write to us. Thank you.

Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.