INOX Leisure Ltd (INOXLEISUR) Q3 FY23 Earnings Concall Transcript

INOX Leisure Ltd (NSE:INOXLEISUR) Q3 FY23 Earnings Concall dated Jan. 30, 2023.

Corporate Participants:

Alok Tandon — Chief Executive Officer

Siddharth Jain — Director

Kailash B. Gupta — Chief Financial Officer

Analysts:

Ankur Periwal — Axis Capital Limited — Analyst

Abneesh Roy — Nuvama Institutional Equities — Analyst

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Arun Prasath — Spark Capital Advisors — Analyst

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Karan Taurani — Elara Capital — Analyst

Preet Malde — Centra Advisors LLP — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to INOX Leisure Limited Q3 FY ’23 Results Conference Call, hosted by Axis Capital Limited. [Operator Instructions]

I now hand the conference over to Mr. Ankur Periwal from Axis Capital Limited. Thank you. And over to you, Mr. Periwal.

Ankur Periwal — Axis Capital Limited — Analyst

Yeah, hi. Thank you, and good evening, friends, and welcome to INOX Leisure Limited’s Q3 FY ’23 post result earnings conference call. The call will be initiated with a brief management discussion on the earnings performance followed by an interactive Q&A session. Management team will be represented by Mr. Siddharth Jain, Director, INOX Leisure Limited; Mr. Alok Tandon, CEO, INOX Leisure Limited; and Mr. Kailash Gupta, CFO, INOX Leisure Limited. We will start with the opening remarks from Mr. Alok on the business performance, followed by few words from Mr. Siddharth Jain, and then we will open the session for Q&A session.

Over to you, Alok sir.

Alok Tandon — Chief Executive Officer

Hi. Thanks a lot, Ankur. Thanks a lot for this introduction. And hi everyone and a very good evening to all of you. I am Alok Tandon. And with me I’ve got my colleague, Mr. Kailash Gupta who is the CFO of the company and Mr. Siddharth Jain will also be joining us on the call. And I would like to welcome all of you and all the participants on this call to this quarterly earnings call which we have.

Our board has approved the quarterly results for Q3 and for nine months FY ’23, and the same has been uploaded on the website of the stock exchanges and the company’s website. The performance of the third quarter reflects the return of the usual hustle, bustle and carefulness in our cinemas, something which us as well as the Indian cinema industry is known for. And it was yet again the content who has played a significant role in this comeback story.

I take a lot of pride in sharing that we have once again topped our quarterly benchmarks with the highest ever quarterly average ticket price and spend-per-head, which go on to show that our bond with the consumers remains strong and enriching. The quarter was blessed with some phenomenal blockbusters, including Avatar: The Way of Water, Kantara, Ponniyin Selvan: Part 1 and Drishyam Part 2, resulting in healthy footfalls.

The company continued its strive to rollout consumer-centric innovations on content, technology and F&B front. With the live screening of FIFA World Cup Qatar 2022 and the ICC T20 Men’s Cricket World Cup, INOX enthralled its sports-loving audiences. On the technology front, a revolutionary seat-integrated sound technology, AmpliX was launched at INOX Megaplex in Mumbai offering a 360-degree spherical audio experience on cinema seats. We went on overdrive on the culinary front with the introduction of an array of movie-centric and seasonal specialities, ensuring a higher quarterly spend-per-head than ever before.

With Pathaan breaking the shackles and creating multiple records, the company expects a greater turnaround in the business going forward, thanks to a fascinating content line-up in the upcoming quarters, with releases like Shehzada, Selfiee, Tu Jhoothi Main Makkaar, Bholaa, John Wick: Chapter 4, Ant-man and the Wasp: Quantumania, Vaathi, Shaakuntalam and many more movies. We will continue to innovate on the content, F&B and the technology front and we’ll remain committed to our endeavors of offering the best movie watching experience.

Pertaining to a merger with PVR, Honorable National Company Law Tribunal, Mumbai bench has allowed the proposed scheme on 12th of January, 2023. A copy of the detailed order is already uploaded on the NCLT website. We have also provided the estimate timeline for the completion of the merger in our earnings presentation.

Now let me take you through the key highlights. In ninth month FY ’23, INOX has made the highest screen addition in the industry of 45 screens. In Q3 FY ’23, we’ve had the highest-ever quarterly average ticket price of INR230 and SPH of INR106. In nine months FY ’23, we have had the highest average ticket price at INR226 and SPH at INR101. We have a strong liquidity position. And as on 28th of January, 2023, we had INR230 crores in cash and cash equivalents. We are the only national chain that is net-debt free.

Now if I look at some of the financial highlights of Q3 and nine months FY ’23, they are as follows. And just to let you know that throughout our earnings presentation, we have compared Q3 and nine months FY ’23 with Q3 and nine months of FY ’20. As we all know that FY ’22 was impacted by COVID-19. Also the figures exclude Ind AS 116 impact. For Q3 FY ’23 the revenue is at INR522 crores, which is 1% increase as compared to INR518 crores in Q3 FY ’20. EBITDA is at INR87 crores compared to INR108 crores in Q3 FY ’20. Adjusted PAT is calculated after excluding exceptional items and deferred tax loss on account of business loss written off is at INR40 crores as compared to INR51 crores in Q3 FY ’20.

For nine months FY ’23, the revenue is at INR1,492 crores as compared to INR1,538 crores in nine months FY ’20. EBITDA is at INR220 crores as compared to INR308 crores in nine months of FY ’20. Adjusted PAT is at INR92 crores compared to INR144 crores in nine months FY ’20. In Q3 FY ’23, the footfalls are at 153 lakhs as compared to 169 lakhs in Q3 FY ’20. In Q3 FY ’23, occupancy is at 23% compared to 27% in Q3 FY ’20. ATP is at INR230 compared to INR204 in Q3 FY ’20. SPH is at INR106 for Q3 FY ’23, which is a 31% increase as compared to INR81 in Q3 FY ’20.

For nine months FY ’23, the footfalls are at 453 lakhs as compared to 532 lakhs in nine months FY ’20. In nine months FY ’23, occupancy is at 23% as compared to 29% in nine months FY ’20. ATP is at INR226 compared to INR199 and SPH is at INR101, which is 26% increase as compared to INR80 for nine months FY ’20.

Our control over fixed costs has been phenomenal. We can see that from the numbers which is already there in the presentation. When we compare Q3 and nine months FY ’23 and Q3 and nine months FY ’20 on a per screen basis, majority of our fixed costs had decreased. Employee benefit expenses, including agency manpower, has gone down from INR72.2 crores in Q3 FY ’20 to INR66.6 crores in Q3 FY ’23. On a per screen basis, it has reduced from INR12.7 lakhs per screen to INR10 lakhs per screen respectively, which is a 21% reduction.

Power, fuel, R&M expenses have increased from INR38.6 crores in Q3 FY ’20 to INR45.4 crores in Q3 FY ’23. However, on a per screen basis, it is stable at INR6.8 lakhs per screen. Rent & CAM have increased from INR97.1 crores in Q3 FY ’20 to INR124.5 crores in Q3 FY ’23 due to increase in number of screens, as I mentioned in power and fuel and R&M earlier. But on a per screen basis, it has marginally increased from INR17 lakhs per screen to INR18.6 lakhs per screen respectively, which is only a 9% increase.

Other overhead has gone down from INR35.8 crores in Q3 FY ’20 to INR32.4 crores in Q3 FY ’23. On a per screen basis, it has reduced from INR6.3 lakh per screen to INR4.8 lakhs per screen respectively, which is a huge reduction of 24%. Our distributor share as a ratio of net box office collection went down from 45.3% in Q3 FY ’20 to 43% in Q3 FY ’23 and our F&B contribution has shown phenomenal improvement. F&B contribution has increased from 75.3% to 77.4% for Q3 FY ’20 and Q3 FY ’23 respectively.

In terms of the shareholding structure, as on 27 January, 2023, FIIs owned about 19.16% of the company, the DIIs owned 24.72%, promoter and promoter group hold 44.04% and public and others owned 12.08%. The share price as on 27th of January, 2023 was about INR504.40, which gave the company a market capitalization of INR6,171 crores. The company added four new properties with 15 screens in Q3 FY ’23; a three-screen multiplex at CMR Mall, Gajuwaka; four screens at Centro Mall, Mysore; three screens at Laila Mall, Vijayawada; and five screens at RCube Monad, New Delhi. Going forward, we plan to add — and as we speak, in this quarter, we have already opened two screens in Connaught Place in Delhi. So taking a total count to 722 screens.

Going forward, we plan to add six more properties and 30 more screens till 31st of March, 2023. At present, we are operational in 18 states and two union territories, present in 74 cities with a 170 properties, 722 screens and approximately 1.6 lakh seats. Beyond FY ’23, we have signed-up to the extent of nearly 15 more properties, 819 screens with 1.5 lakh seats. And once this entire pipeline is fully implemented, we will have 291 properties, 1,571 screens and 3.16 lakh seats. In Q3 FY ’23, we had movies like Avatar: The Way of Water, Kantara, Ponniyin Selvan: Part 1 and Drishyam to just name a few. And we are delighted to inform you that we have a very healthy line-up of movies already waiting to be released and which I just spoke about earlier.

As the capex is concerned, in the beginning of FY ’23, we had organically planned to open 77 screens, out of which 47 have already opened. All 77 screens are being funded through internal accruals. The proposed acquisition of Luxe Cinemas, Chennai with 11 screens would be done through a mix of debts and internal accruals.

I would also like to reiterate that our liquidity position is very strong. And as on 28 January, 2023, we have INR355 crores which includes undrawn limits of INR125 crores. Alternatively, we own six cinema properties and a head office. And as per the market valuation, if required, we can raise close to INR400 crores by doing a sale-leaseback of these properties. As on 28 January, 2023, we have a gross debt of approximately INR162 crores.

Well, this was a brief about the quarter which has gone by. And I would request Mr. Siddharth Jain to say a few words to everyone on this call.

Siddharth Jain — Director

Yes, hi. Can everyone hear me?

Alok Tandon — Chief Executive Officer

Yes, Siddharth, you can go ahead please.

Siddharth Jain — Director

Okay, wonderful. Well, hello everyone. And we just completed our 151st board meeting earlier today. I thought I’d take this opportunity of speaking to all of you as today is of course a very emotional day for us, it would be our last board meeting and it would also be our last earnings call. So I just wanted to take this opportunity of really thanking all our stakeholders, of course, our investors, all the analysts whether it was standing by our side in our tough times or applauding us for our victories or showing us the right direction when it mattered the most. All of you have been a phenomenal support system for us at INOX and our leadership team.

After being incorporated in 1999, it’s been a tremendous journey of 24 years. We had 722 screens today. But today, we stand at a very, very exciting time, in fact, almost auspicious that as our — as the Hindi film industry, as everyone is seeing, is going through some historic moments right now. We are going to start a new journey along with PVR. And I am extremely excited about the potential of this company going forward and can’t wait to see its journey and want to thank all of you once again for being part of INOX for all these years. And I do hope you will continue to support the merged entity in the years forward.

Once again, thank you for your support and encouragement and look forward to hearing all your suggestions and working with you and creating more value for all our stakeholders going forward. Thank you.

Alok Tandon — Chief Executive Officer

Thank you, Siddharth. Now we can open the floor for question and answers. And Kailash and I will be more than happy to answer any questions you have.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Yeah. Thanks for the opportunity, and congrats on very good numbers. My first question is, how is the pipeline of next two months? I understand that the movies which you mentioned and Pathaan movie obviously has done much better than initial expectation. So taking that into account, how is the next two, three months because there is an exam season also? So historically seven months has been a bit weak in terms of footfalls because of the exam. So does anything changed because of Pathaan’s very good performance? Because in the past, whenever such a slowdown has happened in the Hindi, we have seen that once a good movie and good footfall happens, the consumer behavior also changes. So would you expect that to happen?

Alok Tandon — Chief Executive Officer

So Abneesh, thanks for always being the first person to ask a question. Well, let me tell you, Pathaan, you rightly said has done amazingly well. I think it’s exceeded all possible expectations and we at INOX are quite excited about the numbers which we are getting and the housefull shows we are getting. And as I said earlier in my opening remarks is that the hustle and bustle is back in the lobbies, and that’s something which we all live for in the cinema business.

Well, I would say that the upcoming movie line-up is also quite interesting with the Ant-man coming. We have Vaathi in Tamil. We have Shaakuntalam in Telugu. Selfiee is coming on 24th of February. We have Creed 3, which is also an IMAX. So the movies which are there are quite nice. If I look at the March month, we have The Son. We have this entertainer from Ranbir Kapoor and Shraddha Kapoor called Tu Jhoothi Main Makkaar. We have Shazam: The Fury of the Gods, which is again an IMAX. We have a number of IMAX movies. So we are spoiled for choices where IMAX is concerned. We have John Wick: Chapter 4 coming. Bholaa in 3D looks very, very good. And we have Dasara in Telugu. So the line-up I would say till 31 March is — if we go by the entire slate, I would say, is really outstanding.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sure, thanks. One follow-up on that. So Pathaan, of course, has done well. It’s a mass entertainer. So my follow-up question here is, the two key issues of Hindi movies not doing well generally understood is that it was too niche a content while South Indian movies are very mass entertainment, which Pathaan is. So is that issue getting addressed?

And second is, in terms of the pricing, etc. or the marketing or say the number one hero taking the bulk of the budget, are those issues also now slowly getting addressed? I understand there is a lag effect before these issues can be addressed, but now three, four quarters of very poor performance mostly has been there for Hindi movie industry, there have been three, four exceptions, I understand that. But being a veteran, where is the Hindi movie industry in these two aspects?

Alok Tandon — Chief Executive Officer

Well, Abneesh, I have always gone on record to say that you cannot write-off the Hindi film industry which is a 100 year-old industry. And the same thing has been proved with Pathaan. Earlier, we used to have hits and then followed by a few movies which didn’t do well at the box office and then again a hit came and so on the cycle was there. But unfortunately this time, the movies which have not performed well have all clubbed together. That does not mean that the Hindi movies have not done well.

Well, if you look at quarter one, if I remember right, we had Bhool Bhulaiyaa in Hindi. Then in Q2, we had Brahmastra. We had another movie which did well. And Drishyam 2 has done exceedingly well in Q3. So you can’t write-off the Hindi film industry. Yes, it so happened that there was a blip in between where the stories which were told did not resonate with guests. That’s something else and that can happen to any industry. But I think that things are changing. Pathaan has proved that a good quality content does work. People come out in hoards to watch a movie, and I think it’s just the beginning now. The line-up which I just mentioned, I am very hopeful that the movies will do well and people will enjoy watching the movie on the large screens.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sure, sir. That’s useful. Last question. Essentially, when I see the numbers which you put out in terms of comparison with the pre-COVID, ATP is much higher, occupancy is a bit lower. I understand the impact of the Hindi movies. But I’m just asking versus your pilot project of the INR75 on the International Cinema Day which you normally do every year. And secondly, you also had this INR99 pricing few days back. Is there any pilot project which have suggested that at this ATP the occupancy could be a bit better or already you are doing, it is more of the Hindi movie issue that is dragging down the occupancy versus the pre-COVID?

Alok Tandon — Chief Executive Officer

Well, I won’t call it a Hindi movie issue. I will just say it’s quality of content whether it’s anything. Now you said that, yes, we had more occupancy in Q3 FY ’20 because I think there were movies like War at that time, Houseful 4, we had Bala, we had Good News and we had Dabangg 3. And in this Q3, we had Avatar and Drishyam 2. Yes, Kantara and PS-1 did very well with Vikram Vedha, but then footfalls were comparatively low. So it all depends on the content we have.

When you talked about INR75 and INR99, well, I would say, Abneesh, these are marketing efforts which we take. It’s not that INR75 will always get in great crowds. I always maintain and I always say that even if we price a movie free and if the content is not good, nobody will come in. So today what we have done is that where our average ticket price is concerned or where our spend-per-head is concerned, it all depends on three factors which I say in every investor call. One is the cost structure of the property. Number two is the paying propensity of the people. And third is the newness of the film and that will continue happening.

So to answer your question directly that if we reduce our prices will more people come in? The answer is no. What we are looking at is that sweet spot between footfalls and the ticket price. And for us, it’s important to maximize our GBOC and that’s all what we all are looking for.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sure, sir. Thanks, and all the best for the new Avatar. Thank you.

Operator

Thank you. The next question is from the line of Jinesh Joshi from Prabhudas Lilladher. Please go ahead.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Yeah. Thanks for the opportunity. Sir, I have a question relating to the merger expense.

Operator

Jinesh, may I request you to unmute your line from your side and go ahead with your question, please.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Am I audible now? Hello, am I audible now?

Operator

Jinesh, can you hear us?

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Am I audible?

Operator

Yes, you are.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Yeah. Thanks for the opportunity. Sir, I have a question pertaining to the merger expense. I think your partner did not report any kind of merger expense this quarter. So how does it get decided as to who will bear this cost? And is there any further expense pertaining to merger that is expected to hit us in future?

Kailash B. Gupta — Chief Financial Officer

Jinesh, let me take this question. So INOX has substantial amount of the merger costs. That’s why we have reported it separately. For the partner, some of this cost is insignificant as compared to the size of the P&L. That’s why they have not reported separately. I don’t think you would expect anything larger in the combined balance sheet.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Sure, sir. And any further expense which is expected to hit us or is everything booked for?

Kailash B. Gupta — Chief Financial Officer

Everything is booked for till now whatever is incurred. Of course, there could be some more costs which will come, but not pertaining to the affairs which we did till now. So probably, if going forward anything happens on the merger-related or integration-related costs, those costs will be added up as and when they incur.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Sure, sir. Sir, second question is with respect to our ad revenue recovery. So if I remember correctly, in the previous quarter, our ad revenue recovery over the pre-COVID base was at about 65% and in this quarter I think the recovery is at about 60% despite the content being good vis-a-vis the previous quarter. So is there any specific reason you would want to highlight over here?

Alok Tandon — Chief Executive Officer

No, Jinesh. It’s not a matter of concern. We know that ad revenues are coming back. Media planners are speaking with us. And for them, cinema is a very important place where they can advertise. So I would not lay a lot of emphasis on a few percentage points up or down. But yes, we are inching towards our pre-COVID levels. And very soon, in the next couple of quarters, you will see those numbers.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Sure, sir. One last question. Can you share what is our current share of online bookings? And has it changed materially post-COVID?

Alok Tandon — Chief Executive Officer

So post-COVID, yes, it’s definitely gone up. So today, if I can say about 60% to 62% comes from online booking.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Sure, sir. Thank you, and all the best.

Operator

[Operator Instructions] The next question is from the line of Arun from Avendus Spark. Please go ahead.

Arun Prasath — Spark Capital Advisors — Analyst

Thank you for the opportunity. My question is first related to on the expense part. On a per screen basis, our employee expense, I believe, just has come back to the FY ’20 and as well as the other overheads. And of course, there is a corresponding reduction in the revenue per screen. If I only look at the box office revenue per screen, it is also lower by close to around 10% to 12%. So my question is, if you assume that the revenue per screen gets back to the pre-COVID levels or on a steady-state basis it is going to be back, can we — will there be any impact on the employee expense per screen or is it going to be more or less at the current levels on a per screen basis?

Alok Tandon — Chief Executive Officer

So Arun, let me tell you, for us, employee expense is a fixed cost. Revenue per screen does not matter at all. That’s number one. Well, we have decreased a lot of expense. And as I said earlier that we did a lot of multi-tasking during COVID. We did a lot of training sessions with our key members. And we ensured that we do not go back to the headcount which we had pre-COVID, primarily because we wanted people to know about other departments and we wanted them to be — to do multi-tasking. Going forward, I think you should see the same run rate. And I do not think that the per screen headcount should increase drastically.

Arun Prasath — Spark Capital Advisors — Analyst

So even if the footfall per screen goes back to the previous levels, we are confident that this will not go that way?

Alok Tandon — Chief Executive Officer

Yes.

Arun Prasath — Spark Capital Advisors — Analyst

Understood. Thank you. Second question is on the screens that is going to come after the merger. You have mentioned closed to around 800 screens or close to 115 properties. Is it most of this is only is at the LOI stage or a detailed contract is done? If not, will we re-visit the contractual terms with the developers by the combined entity? How we should look at this per screen which — post-merger screen additions which will come?

Alok Tandon — Chief Executive Officer

Well, I think we should look at it as 819 screens which will be added to the merged entity. That’s how I look at it. Whether you are saying that they are inked or not, yes. Let me tell you, all of these 819 screens are inked. So we have got supporting documents to show that. INOX Leisure Limited has sign on them. So that’s number two. Whether we will re-look at the commercials, I doubt that will happen, because these are already inked documents and going forward we will continue with that.

Arun Prasath — Spark Capital Advisors — Analyst

So no scope for any synergies coming from — cost synergies coming from these properties?

Alok Tandon — Chief Executive Officer

Well, I would say, cost synergies, there are other ways of looking at cost synergies; economies of scale, having the best practices to reduce electricity consumption, to have multi-tasking across all departments to reduce manpower cost, to ensure that the might of the two companies, ensure the other overheads which are there. So I would say that there are other ways also, Arun, of looking at it.

Arun Prasath — Spark Capital Advisors — Analyst

But at the property level, the scale wouldn’t matter whether we have 1,000 screens or 2,000 screens. The property level unit economics, how it is going to get affected by the merger unless and until we do some kind of changes at the commercial to the commercial terms? That is something that I’m — we are yet to understand.

Operator

Participants please stay connected. Line for the management dropped. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead.

Alok Tandon — Chief Executive Officer

Yeah. I said, Arun, I doubt that any issue — anything will change at the property level because properties ourselves are very, I would say, managed.

Arun Prasath — Spark Capital Advisors — Analyst

All right, sir. I understand that better. Thank you. Thank you very much.

Operator

Thank you. [Operator Instructions] The next question is from the line of Girish Pai from Nirmal Bang. Please go ahead.

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Yeah. Thanks for the opportunity. And it’s been a pleasure [Technical Issue] management over the years. So a couple of questions. The windowing period has not been adhered to by certain South India movies despite the changes that have happened since 1st of August of 2022. Do you think that will change post the merger? Hello.

Operator

Participants please stay connected. The line for the management dropped again. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected.

Alok Tandon — Chief Executive Officer

Yes, Girishji.

Kailash B. Gupta — Chief Financial Officer

Girish, are you there?

Operator

Girish, can you hear us?

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Hello, Can I…

Operator

Yes. Please go ahead with the question once again.

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Okay. So I was asking about the windowing period which had gone back to the normal levels starting 1st of August 2022, but I do see that there are certain South India movies which are still not adhering to it. So do you think that you can probably discipline them post the merger? Is that the expectation one should have?

Alok Tandon — Chief Executive Officer

Well, Girish, no. I would say that I can only talk from INOX’s point as of now as I’m conducting the INOX call. Well, I think every producer is following what was decided between the producer and INOX or our team that what the windowing pattern should be and the weeks they should be.

So that’s being followed. In the new entity, I don’t know that. I doubt that things will change. We as a combined entity will look at what the things have been signed between the producer and the company. So at that time, instead of INOX, we’ll be looking at the PVR as well as INOX combined entity. And I think that things will be the same. As per the contract which we will have with various producers, they will be honoring that and we will be following that.

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Okay. And next just with single screen theaters, I hear that with Pathaan a lot more single screen theaters have opened up. So what is the view now? I mean, how many of the original single screen theaters that existed pre-pandemic are still operating as we speak right now? And do you think that there could be kind of diversion of footfalls from there to us or the formal industry so to speak or the multiplex industry?

Alok Tandon — Chief Executive Officer

We were happy that the single screens have opened up and we need more screens to open up in India whether it’s a single screen or a multiplex screen. We need more screens. We need not — we need more people to come to these properties to enjoy a movie.

Now how many screens have specifically opened up for Pathaan, I don’t have an answer to that. But I know that out of about 9,000 screens, there are about 3,200 to 3,300 multiplex screens and rest are all single screens. And yes, you’re absolutely right that reports which are coming in, it is very heartening to know that people are going back to single screens and the movie is doing well. Exact headcount of the single screens, I may not be able to give you.

Operator

Girish, do you have any follow-up question?

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Yeah. I wanted to ask about the convenience fee negotiation with both BMS and Paytm which I think is probably on the anvil. Would you be kind of re-negotiating on the same terms in the upcoming — whenever it happens?

Alok Tandon — Chief Executive Officer

Well, I cannot talk about the merged entity at all as of now because I don’t know. But I can talk about the INOX numbers which we have today is that we have quite some time for us to re-negotiate a deal with BMS as well as Paytm.

Girish Pai — Nirmal Bang Institutional Equities — Analyst

Okay, fine. Thank you.

Operator

Thank you. The next question is from the line of Karan Taurani from Elara Capital. Please go ahead.

Karan Taurani — Elara Capital — Analyst

Hi. Thanks for taking my question. My question is around authentication of the box office collections. So if you clearly look, different numbers have been given everywhere. I am sure that as companies PVR, INOX also have been reporting numbers in terms of net box office. But are you kind of doing something to address this issue, because clearly there is transparency at stake here? I mean, I’m not saying that debating over numbers whole year, but I mean, anything that can be done to address this issues from a longer term? And any kind of measurement or any kind of benchmarking that can be done to actually authenticate box office? Because I mean, social media is just quite crazy. They were behind the film industry. And I mean, it looks like now they’re behind with cinema industry, wherein they are kind of sharing lot of these things wherein no cinema halls are [Technical Issue] for Pathaan, but still the collections numbers are where they are. So anything to be done in terms of authentication of box office numbers that industry is looking towards?

Alok Tandon — Chief Executive Officer

Well, Karan, I think it’s the first time I’m hearing about this something called the authentic numbers are there or not there because for so many years I have been conducting these calls and no one has ever doubted the numbers which are reported either by the exhibitors or by the producers.

Now when you are saying that social media is saying XYZ, well, I don’t think that I should be commenting on what social media is saying. But you are in the industry, I’m in the industry and we know what the numbers are. And I am not — I’m just hearing one number every day and that’s the final number. So as you and me are in the industry, I think it’s our duty to tell people that the numbers are accurate, the numbers are correct. And whatever the social media is talking about is wrong.

So even if this is an authentic portal, I don’t know what do you mean that, how can there be a portal which will give you all the numbers but all the chains are reporting the numbers and sharing it with the producer of the movie, and we all are paying GST, so that number is in public domain also. So I don’t think that any change is required. It’s people like you and me I think we need to educate people that what’s coming in social media may not be correct and we have to take it with a pinch of salt.

Karan Taurani — Elara Capital — Analyst

Right. And in fact, multiplexes have done the right way and they’ve been much more transparent as compared to what single screens would be and things are moving on the right path. But again, I mean, there are certain attributions or certain questions being raised on the box office authentication as well. So hence, that point. So anyway, sir, I think that’s fine. I got the answer.

Alok Tandon — Chief Executive Officer

You used the sentence much more transparent. We’re 100% transparent.

Karan Taurani — Elara Capital — Analyst

Of course. Of course. Exactly.

Alok Tandon — Chief Executive Officer

We are absolutely transparent.

Karan Taurani — Elara Capital — Analyst

Right, right. Absolutely. Just the second question is around footfalls. I mean, of course it’s very important for Hindi content to come back. So let’s look at FY ’24. I mean, I know INOX will be a part of the merged entity, but I’m sure every year you have to take this kind of ticket price hike, because this year — last year, probably you took a hike of 15%, 20% or maybe sometimes more than that also in some of the quarters. But I mean, it’s very important for footfall to actually come back on a pre-COVID — versus pre-COVID levels in F ’24. So how do you see that panning out, because I think that could really have a big negative impact in terms of the overall growth? If you have just one leg of growth in the form of ticket prices, which may not be as high next year that it was last year. What’s your take on that?

Alok Tandon — Chief Executive Officer

So Karen, let me correct you first. The ticket price increase has never been 15% or 20%, never ever. What you are seeing today is a comparison between FY ’20 numbers and FY ’23 numbers.

Karan Taurani — Elara Capital — Analyst

Yes, pre-COVID. Yes, yes.

Alok Tandon — Chief Executive Officer

No, no, let me finish. Number two, Karan, we have had a CAGR of 5% year-on-year where ticket prices are concerned. So I don’t know how that number 15% came up, because if you see for Q3 FY ’20, the ticket price was INR204 and in Q3 FY ’23 it is INR230, which is 13% increase. So I don’t know how you’ve got that number of — and this is over a period of three years. Yes, I think we can share with you our numbers of Q3 FY ’21, Q3 FY ’22 and Q3 FY ’23 numbers are already there, you see it’s a CAGR of 5%.

Karan Taurani — Elara Capital — Analyst

No, no, I — yeah, please.

Alok Tandon — Chief Executive Officer

Please go ahead.

Karan Taurani — Elara Capital — Analyst

Yeah. So I’m saying the CAGR of 5% is fine, but the only thing is that this financial year, the 15% number has looked good. I mean, it’s probably had a big delta of the growth because things have opened up after three years completely and you’ve taken that 5% CAGR which is justified. But assuming that FY ’24 you again take a 5% hike in terms of ticket prices and the footfall does not recover or probably grows more than 2%, 3% on a Y-o-Y basis, how do we see things coming? Because clearly, what we are betting upon in terms of valuations for these companies is strong double-digit growth. So I mean, of course, screen addition is there, but on a SSG basis also, do we kind of see a situation wherein maybe 10% of the footfalls versus pre-COVID will never come back and we’ll have to hang on to this growth of 7% to 8% of ticket and footfall over the coming years?

Alok Tandon — Chief Executive Officer

So Karan, that’s very difficult to say whether we’ll lose 10% or not, only time will tell. But looking at the line-up which I read out earlier, I think that’s not a concern at all. When you’re talking about ticket price hike, yes, we will increase ticket prices at the rate of inflation year-on-year. We’ve always done that and we will continue doing that. So that’s not an issue at all. The quality of content has been issue, which we all know that once a good movie comes, people come back to cinema halls. Then they want to see their stars on a large screen, they want to see uncompressed sound and crystal-clear images and that’s something which we are offering.

So it’s — I don’t think I’ll be able to comment whether people will — whether we have lost a certain percentage of people after COVID, I think only time will tell that. But I am very bullish about the Indian film industry. I’m very bullish that people will come to cinema halls, because for us Indians, I have always told you, it’s a celebratory thing to go to a cinema hall to watch it with family and friends and that will always continue happening, Karan.

Karan Taurani — Elara Capital — Analyst

Thank you so much. Thanks. That’s it from my side.

Operator

Thank you. The next question is from the line of Preet from Centra Advisors. Please go ahead.

Preet Malde — Centra Advisors LLP — Analyst

Hello. Good evening. Actually, I wanted to understand how do we assess the growth of multiplexes? Do we see the industry, the film exhibition industry as a whole growing or do we see the multiplexes gulping up the share of single screens? Because at this point in India, we have a screen density of around seven screens per million people and in INOX we are seeing 30% occupancy rates. So how do we see the industry growing?

Alok Tandon — Chief Executive Officer

Well, we see the industry growing by the gross box office which is increasing year-on-year. We are seeing with more titles coming out year-after-year. We are also seeing great footfalls whether it’s a multiplex or a single screen. It’s not either or, it is both. And that’s how, Preet, we judge whether the industry is doing well or not. So the industry has really increased. Figure that COVID period when there was nothing to show. But the gross box office — domestic historical numbers have gone up year-on-year. And here, I’m only discounting the two years of COVID. Otherwise, the Indian film industry has always grown.

Preet Malde — Centra Advisors LLP — Analyst

Okay. So what I was saying is, do we see the total number of screens as a whole grow or do we see the multiplexes taking up the share of single screens?

Alok Tandon — Chief Executive Officer

No, nobody is taking up the share of anybody. Everybody has got their own catchment, their own market and their own target audience. So it’s not that one is eating into the pie of the other. I think the entire cinema industry in India is growing and that’s important for us and that’s a very, very positive sign.

Preet Malde — Centra Advisors LLP — Analyst

Okay.

Alok Tandon — Chief Executive Officer

And we all know India is very under-screened. India is very under-screened. So the more screens we have, the better it is for everyone.

Preet Malde — Centra Advisors LLP — Analyst

Exactly. Okay. I just wanted to understand one more thing. What is the share of our premium screens to the normal screens?

Alok Tandon — Chief Executive Officer

Well, I don’t know premium screens. When I define, I define premium screens as various formats also. So that’s the Insignia, it’s a IMAX, it’s a Phoenix, it’s a MX4D. So if I look at everything is about 12% of the total seat count — of the total screen count.

Preet Malde — Centra Advisors LLP — Analyst

Okay. And how much does the ATP varies between normal screens and premium screens?

Alok Tandon — Chief Executive Officer

Drastically. I would say, the normal screen depends if it’s — see, it varies. I can’t give you one number, Preet. It’s a different for MX4D, it’s a different for IMAX, it’s a different for Insignia, it’s different was Phoenix, it’s different for Kiddles. But yes, it commands a higher average ticket price than average because the capex is also high in those formats. So yes, it is more, but very difficult to tell you that what the actual delta is.

Preet Malde — Centra Advisors LLP — Analyst

Okay. So if I wanted the rough range, if u can just guide me on that?

Alok Tandon — Chief Executive Officer

Pardon please.

Preet Malde — Centra Advisors LLP — Analyst

A rough range of the difference between the two?

Alok Tandon — Chief Executive Officer

See, again, it’s very difficult. As I said that if I am selling the ticket at INR200 somewhere, the IMAX maybe at INR350, the Phoenix may be at INR360, the Insignia property is depending where we are, we’ll have a different price range. So there is no price range in this. Every property, every format has got a different pricing strategy. So I can’t even tell you that MX4D across all properties in India will have the same price, no, it will not. It will vary from where it is, what’s the location and what’s the paying propensity of the people over there and what’s the cost structure of the cinema. So there’s no range which I can give you, Preet.

Preet Malde — Centra Advisors LLP — Analyst

Okay, okay. Makes sense. Thank you so much.

Operator

Thank you. I now hand the conference over to the management for closing comments.

Alok Tandon — Chief Executive Officer

Thanks a lot. As Mr. Siddharth Jain said that this is the last investor call for INOX Leisure Limited, and we really thank all of you who have supported us over all these years. And we I think tried our level best to incorporate all the suggestions which you gave us. Thank you very much.

Siddharth Jain — Director

Thank you so much.

Operator

[Operator Closing Remarks]