PVR INOX Ltd (NSE: PVRINOX) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Ajay Bijli — Managing Director
Sanjeev Kumar Bijli — Executive Director
Gaurav Sharma — Chief Financial Officer
Unidentified Speaker
Saurabh Pant — Vice President, Finance and Investor Relations
Alok Tandon — Chief Strategic Advisor
Analysts:
Harsh Shah — Analyst
Abneesh Roy — Analyst
Kavish Parekh — Analyst
Arun Prasath — Analyst
Jensen Jacob — Analyst
Tanay Gandhi — Analyst
Gaurav Gandhi — Analyst
Aditya Sen — Analyst
Vaibhav Muley — Analyst
Umang Mehta — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the PVR INOX Limited Q3 FY ’25 Results Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Harsh Shah from Axis Capital. Thank you, and over to you, sir.
Harsh Shah — Analyst
Yeah. Thank you, Sima. Good afternoon, everyone, and welcome to PVR INOX Limited Q3 and nine months FY ’25 post-results earnings call. The call will start with brief management remarks on the earnings performance, followed by an interactive Q&A session.
PVR Inox management will be represented by Mr Ajay, Managing Director; Mr Sanjiv Kumar, Executive Director; Mr Gaurov Sharma, Chief Financial Officer; and other senior management personnel. Over to Mr Ajay for your initial comments. Thank you.
Ajay Bijli — Managing Director
Thanks. Good afternoon. I’d like to invite you all to discuss the unaudited results for the quarter and the nine months ending, 31 December 2024. We uploaded the earnings presentation and the results on our company’s website and the stock exchanges website earlier today, and I hope you have had a chance to review them.
Our Q3 recorded the highest box office collections of this fiscal year given by multiple blockbuster releases. This strong performance-led to the highest quarterly ATP and the SPH reaching INR281 and INR140 respectively. While ad revenues touched INR149 crores, highest since the pandemic. Pushpad 2 emerged as the biggest blockbuster in Indian cinema history, contributing nearly 36% to the quarter three India box office and 12% to the 2024 India box office. Our Q3 started with Tamil and Telogu Cinema leading the way.
Devara Part 1 starring Junior NTRN, starring Kant dominate the box office in October collectively, accounting for nearly a quarter of the month’s total box office collections. Their success reinforced the growing strength of South Indian films, which are increasingly finding traction across multiple regions. However, October was impacted by the underwhelming performance of Hindi and English films as the releases like Jigra and Hindi and Joker 2 from Hollywood failed to make a mark at the box office. November saw a resurgence of Hindi Cinema with two Diwali blockbusters, Singham, again and Year 3, each crossing about INR300 crores at the box office.
Regional films continued their momentum with Amaran grossing over INR250 crores to become the second-highest grossing Tamil movie of the year. Lucky, a mid-budget movie achieved impestive box office success crossing approximately INR90 crores. December was the biggest month of the year, which saw the release of Pushpa 2, which chartered records grossing over INR1,450 crores in India. Dubbed Hindi version achieved INR900 plus crores, setting a new record as the highest-grossing Hindi film of all-time.
Hollywood also found success in Mofasa, a Reliant King which resonated with the urban family audience and collected over INR100 crores at the Indian box office. While Q3 witnessed significant highs, the postponed of key films like Sitar and Chawa, amongst others disrupted the overall box office momentum. Overall, in Q3 FY ’25, we welcomed 37.3 million guests across our cinemas.
In terms of the financial results for the quarter, the following numbers are calculates after adjusting for the impact of 116 on lease accounting. Total revenue for the quarter was INR1,739 crores, EBITDA was INR258 crores and PAT was INR68 crores as compared to revenue of INR1,569 crores, EBITDA of INR226 crores and PAT of INR41 crores in the same-period last year.
After a weak 2024, Hollywood seems ready for a strong comeback in 2025. A lot of sequels of successful franchises are lined-up for leases. We have three Marvel movies, Captain America in February, Thunderbolts in May, Fantastic Four First Steps in July. Impossible final Reckoning Karate Kid Legends in May, Formula One starring Brad Pitt Ballerina and How To Train Yourn Dragon in June. Other notable titles include Superman, Jurassic World Rebirth, Conjuring, the Last Rights, Register Baglands and Afgha 3, Fire and Ash among us amongst others.
From Bollywood, we have starring, Vicki Kaush releasing next week, Shankara sorry, Akshay Kumar and Madhwan, Diplomat starring John Ibraham and starring Salman Khan in Maj. Other notable titles include Jard, Eraid II, Household 5, Jolly, Son 2, Hamas. We also have an Mr who we signed-up for release. We have Thandal starring Chetanya releasing tomorrow. Other notable titles include Good Bagged and Ugly Retro, BD-12, Thug Life, Kantara 2, Rajas, and 69.
We’ve added 77 new screens and exited 67 underperforming screens in the current fiscal year-to-date. For the whole year, the company expects to open about 100 to 110 new screens. Our current screen portfolio stands at 1,728 screens across 350 cinemas in 111 cities in India and Sri Lanka. An update on our new growth strategy. We have signed 100 screens under the new capital-light growth model. Of these 31 screens are under the management contract model and 69 under asset-light model, where up to 80% of the capex investment is contributed by the developer. These screens are expected to come up over the next two to three years.
Post-merger, the company has consistently managed to reduce its net-debt. As of December ’24. Net-debt stands at INR996 crores, which is a reduction of INR435 crores since March 2023. I’d like to now open the platform for any Q&A. Thank you once again for joining.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star in two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to — ladies and gentlemen, we will wait for a moment while the question queue assembles we take the first question from the line of Abneesh Roy from Nuvama Wealth. Please go-ahead.
Abneesh Roy
Yeah, thanks. My first question is on overall consumption impact on your business. So we have seen this quarter and maybe previous quarter also, lot of the FMCG and even discretionary categories call-out a slowdown in urban. Of course, Yost is essentially urban consumption. So how do you see in the near-term this impact I do understand Q4 because exam season anyway pipeline every year is a bit less. But would you be worried in the near-term because of the urban slowdown? And on the flip side, because of the budget, the taxes have been reduced and substantially also. So in the past, have you seen any such measure — similar measure lead to more consumption or is it still fully dependent on the quality of the content?
Sanjeev Kumar Bijli
So I — Abhisha, I — when I look at the content pipeline of this year, which has got impacted because none of the big superstars released any movies this year like or or or NB and even Renbir was in an movies. So I think this year in fact the content pipeline of Hindi was subdued. Then we had Hollywood had a strike and you know, therefore only in the 3rd quarter we found some momentum with Mufasa gladiator 2 and other movies coming. But when I look at the next year’s pipeline and I look at the way people are watching re-releases, in fact, some of the re-releases like Ye Jawani and Diwani have made-up for some of the big movies which did not perform well like game-changer. So I see that content will drive consumption.
Of course, the new tax benefit, which is income tax benefit, which has announced will definitely give more discretionary you know income to the consumers so I add to that the content pipeline I feel consumption is bound to increase is still a very small-ticket size in the overall you know spending pattern of anybody to watch a movie and have a three hours of pure escapism and entertainment. So I see consumption pattern only improving going-forward.
Abneesh Roy
My second question is a bit related to the content only and it’s specific on the Hindi content. So we have seen a few Hindi movie producers facing very tough times because one after the other movies have not done well. And we have also seen, for example, marquee producer like Karan sell-out a major stake to a another company. And we have also heard that in terms of mid-budget movies, there is a — there is a calendar which has become erratic and with strength. So how do you see that funding of Hindi movies because most of the hits are coming essentially from South India or dub South India. So from a funding perspective, how FY ’26 you see for Hindi movie? And if you could talk about mid-budget movies or how the calendar is. And FY ’25, why did the large tentpole kind of Hindi movies not really what was the specific reason? Because normally these can be easily planned. What was the reason for a lack of tentpole Hindi movies.
Sanjeev Kumar Bijli
The reason was because I think a lot of movies got bunched up in ’23, ’24. That’s why it was an aberration to see in one calendar year, three movies of Sharu coming up and Ritik always makes a movie once every two years. So therefore, no movie got released. And had about three films that got released that particular year. So I think last year was all being focused on production. And I also feel that Addar Poonawala putting 50% or buying 50% stake in Dharma is a very good thing because now there’s enough capital there to make more movies. So that was the reason why the movies did not come last year. I’m talking about — and this year now everybody is back. When I look at the lineup and the movies which have been announced and there’s also scrambling for dates, which is a very good sign when people are saying, okay, who wants August 15, who wants 26th January or or big key dates which are coming. So when scrambling for dates happens, that’s only a good sign.
So when I look at the lineup, there is Sitar of Amer Khan, a Lahore of Sunny, sunny after the back of Gather 2 successes is a big one you know very anticipated 11 War being made by Sanjit Bansali then you know basically War II is coming on August which is so plenty of movies on paper, which are released and announced and on-top of Welcome to Jungle, which is a very big franchise, so I’m seeing only good lineup. On-top of that, Hollywood, which from quarter three onwards is now back, Captain America is coming next week only. And then after that we have you know, the final, the Mission Impossible, the new Black Pit, big movie Formula 1, Superman is getting rebooted, Avatar 3. So these are the big blockbuster. So many franchises signed destination, all these films are coming. So for me, the lineup is very strong.
Abneesh Roy
Sure. My second and last question is on the two new developments. One is if you could talk about initial learnings and initial feedback on the first property which you opened in terms of food court with Devyani in Rajasthan, if you could talk about that? And second is in terms of the asset-light model, again, how has been the initial discussions? Is it a game-changer? I do understand 100 screens over three years may not change your overall numbers significantly. But if you could talk about longer-term in terms of your debt levels or your return ratio, how this impacts not on FY ’26 because that’s the first year. But how does the longer-term picture change because of this?
Sanjeev Kumar Bijli
Well, if I can say myself in all humility, the brand, you know, basically anybody who’s able to do an asset-light model or a FOCO model of management fee franchise model goes to show that there is some strength in the brand. So we’ve developed our brand equity with all the key stakeholders, whether it’s a customer, it’s a film fraternity or the developer and people are ready to spend money on the brand and let us only do the management. So I think this has already been done by a lot of retail players, as you know, hospitality brands have done it. Nobody had ever done it in the cinema business. So we were very keen to test the waters with this. 100 schemes we have signed, but there are lots of others which are in the pipeline. And already lot of capital has got deployed in the, 1,7 128 screens that we operate.
And I think time has come to now monetize on the brand equity that we have built. And this will obviously reduce our capital intensity, improve our margins. But at the same time, it will not reduce our growth trajectory. We will still grow by about 122 screens, 100 to 120 odd screens every year. And I think it’s a testimony to the brand and definitely this is bound to bring our debt levels down as well because with — if you have healthy cash flows, a lot of — only so much can be spent on renovations and new properties, rest all will be utilized to pay-down the debt.
Abneesh Roy
Sure, thanks. That’s all from my side. Thank you.
Ajay Bijli
Thanks, sir.
Sanjeev Kumar Bijli
Thank you, sir.
Operator
The next question is from the line of Kavish Parekh from B&K Securities. Please go-ahead.
Kavish Parekh
Hi, team. Thanks for the opportunity. Firstly, I want to get a sense on synergies, so numbers that we had laid out in the time for merger. Where are we now? From here on, what levers do we have to improve the cost structure or margin trajectory? Especially if occupancy stays where it is? And secondly, what is the update on our deleveraging plans? So we had set-out plans to generate proceeds of about $3 billion $3.5 billion from sale of some of our properties. Where do things stand as we speak? So of course, debt reduction this quarter was commendable, but what from here on, considering the weak trends as we go into 4Q?
Sanjeev Kumar Bijli
Would you like to answer the question, please?
Gaurav Sharma
Sure, sure. On your first part of the question regarding synergies, I think to a large extent, we have already implemented steps for integration over the course of last two years. And the cost structure also reflects — if you look at over the course of last 4.5 years and compare on a per screen basis, our fixed-cost has been stagnant even you know, for the Nine-Month period ending December ’24, our overall fixed-cost has been at flat level despite of the cost inflation. So the cost structure is already reflecting a bulk of the merger synergies. I think we will see the impact on margins as the footfalls recover.
Just to give you some directional sense, pre-COVID, at a 32% occupancy, the business used to deliver 18% margins. However, in-quarter three itself this year, at 25% occupancy, the business has delivered 15% margins. So as the occupancies improve, the benefit of synergies and margins will start getting reflected. On your second point around deleveraging, I think our scope deleveraging the balance sheet is one of the key strategic focus areas for us. I think all our efforts are geared towards generating free-cash flow. Despite of volatility in box office, we have been able to reduce our leverage over the course of last 1.5 years. And the pivot towards capital-light model will only aid in that effort. So going-forward, I think we will continue to see reduction in our net-debt levels.
As far as the sale of properties is concerned, I think we’ve been working with some property consultants and we have received some offers for our properties in Pune and Baroda. But even in those locations, there are operating cinemas with positive EBITDA. So at this stage, I think the value and the offer that we have received don’t justify loss of EBITDA that we will incur on the sale of these assets. However, we continue to explore with the consultants for little values or better offers, but the priority is to generate organic free-cash flow and reduce leverage.
Kavish Parekh
So understood, sir. Thanks a lot for that detailed answer. Sir, just a follow-up on our asset-light model. Can we have some more color on how would the economics work-in case of would be asset-light models? And if I can squeeze in one more question, any thoughts on price hikes in our F&B segment? So I think the last hikes we took was in — were in April ’24. So — and this quarter sequentially FNV revenues remained largely flat. So what levers do we plan to exercise to ensure sustained growth in the F&B business.
Sanjeev Kumar Bijli
Because let me go first and then maybe Pramoth can talk about the asset model. On the F&B side, every year, we do take an inflationary increase and it’s not going to be any different for the coming year. We are going to be taking a 5% to 7% increase on certain product items, but that has to be measured against the sales mix. So the way we actually do this is that we always would want to have 50% of our increase coming through volume and 50% of the SPH increase coming through value. So that’s really what we followed you.
Unidentified Speaker
Yeah. So these are two different models. When we’re talking about an asset-light model, it effectively means that the P&L is through our books of account and the developer ends up investing anywhere between 40% to 80% of the capital that is needed to be deployed for the green fit-outs. In this model, it’s a — while it is comparable to a regular lease model, it becomes asset-light because most of the assets on the fit-outs on the cinemax fit-outs are in the books of the developer partner, development partners.
In the FOCO model, the investment is completely by the development partner or the investor and who ends up enjoying the profit and loss and we are eligible to enjoy a management fee anywhere between 6% to 10% of the net of GST revenues that get generated from the property. So these are the two models. So if you look at it, the 100 screens are a combination of asset-light as well as the management model. Management is, we Call-IT the Foco model, the franchisee-owned company-operated model. So this is the combination. As we go-forward on this model, we do look-forward to the major footprint of streams coming from our umbrella in this model. And this will also allow us to expand the footprint a much faster. So that’s how we look at it. I hope it does answer your question.
Kavish Parekh
So I’m clear about the management contract model that we will receive a 60% to 10% management fee. My understanding is this will be across all revenues, ticketing F&B as well as ad revenues. Is that right?
Unidentified Speaker
Absolutely.
Kavish Parekh
And under asset-light model, could you could you just elaborate some more on how the model will work so I understand the capex with 40% to 80% will be borne by developers, but how does this play-out in terms of revenue-sharing?
Unidentified Speaker
Yeah. So in terms of the revenue should think about it that anywhere between 15% to 20%, 15% to 20% is the occupancy cost which the developer would end-up enjoying for giving the property. For the balanced capex that he has given, he becomes eligible for a fixed yield, a yield which could be anywhere between 7% to 12%.
Kavish Parekh
Understood, sir. Thanks a lot. I will join the queue again.
Sanjeev Kumar Bijli
Thank you. Yeah, hi, Sima, are you there?
Operator
Thank you. The next question is from the line of Arun Prasath from Avendus Spark. Please go-ahead.
Arun Prasath
Yeah, good evening. Arun Prasad from Avendus Spark here. Thanks for the opportunity. So continuing the discussion on the asset-light model, can you just throw some light on how does this framework work from our perspective? I mean if you are opening say 100 screens, what — what you will give for the — what you for Foco model and what you will for the asset plate model and which one you will be completely putting 100% of your capex? Or is it left to — option is left to the developer or do we have some say in this? So can you just help us understanding this framework? How do we distribute the — the new screen buckets among these three buckets?
Gaurav Sharma
Yeah. Sure, Arun. I think as explained by Pramod earlier, the strategy is to leverage the brand now and the market presence and scale to drive growth towards more capital-efficient screen openings. I think we will continue to have these — all the three models working in the market. These models will be there. You know, again, these conversations will be dependent on-location, market, developers. You know, in certain locations, we will prefer to go with these models in certain locations. The preference will be with asset-light or management contract models.
We’ve also mentioned that majority of new screen openings from next financial year will be under-capitalized models. So that sort of gives you a directional sense. It’s hard for us to quantify how many screens will be there, but we have signed 100 screens. And as they open up over the course of next two to three years, we will see incrementally more new screen additions under this model. But we will also have these model — the older models working in certain parts of the country with certain developers in certain markets.
Arun Prasath
So I — so I was asking slightly a different question. Say you have — you want to go for a management fee model versus the — where the developer has to pitch in say 50%, 60% capex. So between these two, say, given a location, do you have any say in — say on this or the developer comes out and say that, okay, I want to put 100% capex, no, I will only put…
Sanjeev Kumar Bijli
It will be different. It will be different so different folks. So each of the location or a development represents a unique proposition or a unique opportunity. So it will be very difficult or extremely impossible to suggest that which will be the preferred model, that is one. Our — our preference is absolutely clear that in certain markets, it can only be in certain markets, we would basically have an option for an asset-like model. So it will be driven on a unique case-to-case basis. It will be no one shoe fits-all, so one-size fits-all sort of a strategy.
Arun Prasath
Okay, let me frame it in a different manner. What kind of developers are interested in, say, a Foco model and what kind of developers are interested in say the asset-light model. Is it like more like a premium or model that?
Sanjeev Kumar Bijli
Okay, let me just explain it to you from a real-estate perspective. So let’s say there are developers who have you know, who have a trust in the brand and they believe that the brand does a good job in terms of delivering cinemas. And if they are basically retable assets, they would prefer to get into an asset-light model. That’s a preference from a very developer’s perspective. If the developer is basically doing one unique development, his interest could be aligned towards a management contract wherein he could be enjoying the PLL. But that is like it cannot be generalized across. So if you say the qualification of developers, which developers would qualify for a management contract, which developers would qualify for an asset-light model again, the answer is there is no one answer to this question.
Arun Prasath
Okay, got it. Got it. And secondly, when you said that this will ramp-up your deployment of the screens, obviously, the capex is not a constraint here, but more mall supply, especially in South was our constraint and that is capital is a secondary constraint. So does this solve your primary constraint of mall supply in some of the regions where you are looking to grow faster?
Sanjeev Kumar Bijli
Two things. One is any organization or any company has a management bandwidth. The moment you get into a management and an asset-light model, the resources which come in from the development partners also join hands in terms of developing the cinemas. Be it the design resources, be it the project management resources and then last the financial resources also as well. So they all join hands together, so which basically increases the bandwidth to be able to deliver the right cinema in a given fixed time. The second thing in terms of — you’re asking the mall supply. So the mall supply with the REITs opening up is now on an increasing trend. Including South, you’re seeing the coming up of new malls which are being invested by the larger funds and even in the smaller towns, the malls or the shopping centers are coming up. So the unorganized retail sector is giving way to the organized retail sector.
Arun Prasath
Yeah. Okay, understood. And that means that most of these 100 screens that we have tied-up should be coming from Tier-2, Tier-3 cities. Is the right understanding?
Sanjeev Kumar Bijli
They are in Tier-1, Tier-2, Tier-3. Again, there is — I’m not in one of these statements, have I said that there is a qualifier across management contracts of a satellite models to be in Tier-2 or Tier-3 towns there. Many of them are in Tier-1 towns and Tier-1 developments of maybe even 1 million square feet. We have centers even in million square feet.
Arun Prasath
Understood, understood. If I can just add one more on the bookkeeping questions. On the like-to-like basis, we are showing CAM growing at alarming pace throughout this in this nine months period, much higher than the rest of the fixed-line items. What is the reason for this kind of a growth in CAM?
Sanjeev Kumar Bijli
So if you look at CAM, CAM is our direct proportionality relationship to the — to the — to the input costs. So input costs are human resources if the wages are increasing, so the CAM would increase. So are they dependent on the fuels because the DG sets which still get utilized. So again, if the diesel cost is increasing, CAM goes on for an increase. So does it go for electric — electricity unit charges. If they are increasing, CAM would increase. So that is the proportionate increase which is visible in the CAM charges.
Arun Prasath
Do we have any control on this or it’s whatever the developer builds we need to take it.
Sanjeev Kumar Bijli
We are working alongside with the government as well as the developers. With the developers, we are looking at rationalizing, helping them rationalize these costs to optimize the common area maintenance charges for — across the retail fraternity which is sitting in the mall. Alongside with the government, we are working on a possibility of introducing like the on industrial rates and so on and so forth. So a couple of initiatives which are you know which are in work-in progress with the development partners as well as a representation to the government.
Arun Prasath
Okay. All right. Thanks for answering all the questions. All the best.
Sanjeev Kumar Bijli
Thank you.
Gaurav Sharma
Thank you.
Operator
Thank you. The next question is from the line of Jensen Jacob from Centra Insights. Please go-ahead.
Jensen Jacob
Thank you for taking my question. I just needed a small clarification on our screen additions. At the end of FY ’24, we had reported that our screen count stood at 1,748 screens and currently we are at 17 28 screens, which is a net reduction of 20 screens. But we have also reported that our net screen addition has been 10 screens year-to-date. So could you please clarify this for us?
Saurabh Pant
Jensen, hi, this is Saurabh from the IR team. So maybe you can connect fine, but the figure that you might be referring to, it might not be as of March ’24, it might be as on the date of the IR presentation. You can connect with me offline and then maybe I can take you through the number of screens that we have added. But till-date, we have added about 77 screens and we have closed about 67 screens. By the end of this year, we intend to add another 33 screens. That will take the total addition to 110 and then there’ll be an additional properties with five screen which will get closed. So effectively bringing the total to 72 screens. This effectively brings the net addition for the year to about 38 odd screens. That’s the math. And maybe then we can talk offline on only configuration.
Jensen Jacob
Sure, sure. We can take this offline, sir. Thank you.
Operator
Thank you, sir. The next question is from the line of from Investec. Please go-ahead.
Tanay Gandhi
Hi. So first question is regarding the initiative that you launched regarding those re-releases and people being able to book their own shows. So I just wanted to understand like how has it been — how has it since the past? I think it’s been one or two months since then? And how is the shows count per month and what you all expected to go-ahead with this?
Sanjeev Kumar Bijli
So these are early days for Screenex. The only one thing that I can share with you that we have currently done close to about 100 odd shows under. These are confirmed screenings that have happened, which is very encouraging. Number two, the idea has really got some virality. A lot of people are talking about it and are inviting their friends and family to join the show that they have created. I think this idea is going to be quite lethal and is there to stay. However, may not have the potential to really move the needles. So it will kind of keep picking on 100, 200, 500 shows in a month, but that’s where it is. But it’s a very strong proposition for consumers who love the cinema experience and want to watch movies that they have missed out on. So that’s really what it is, but I guess in about another three to six months time, we’ll have a far more clearer picture on this.
Tanay Gandhi
Thanks. Got it. Thank you. And I just wanted to understand like just a bit of macro where like the past month, we saw a lot of cricket matches, lot of events which were taking place like concerts and stuff like that. So is that eating away from — like going ahead, do you feel that eating away from the share of going to cinemas or both are growing side-to-side in like the entertainment industry?
Sanjeev Kumar Bijli
So actually I would say now each medium feeds off the other. In fact, we’ve also started to screen a lot of concerts and cricket matches. We are also in conversation with BCCI and other bodies to see some of the key matches if we could screen. Concerts is something that we have been screening. In fact, since April till now, close to 4.3% of the total admissions have come in through re-releases, which is the bulk, which is 90% and about 10% through events. So technically this is the piece that we’ll be irrigating as we move forward. These are early days, but we feel that each of this idea will feed it to the other. If there is a concert like Old Play happening, it has only limited capacity, whereas if it beamed live across all theatre or even recorded and played, it is a fantastic revenue model for both cinemas as well as for the concert owners. So technically, we are working very positively and aggressively with all partners within this space to see how we can converge on this.
Tanay Gandhi
Got it. But what I was trying to understand was basically, would you feel that the December — December month and probably even the other October and before that was affected by — like the footballs were great, of course. But do you think it could have been higher if like all these concerts weren’t to take place?
Sanjeev Kumar Bijli
No, not at all because the concert life is about three hours. So it kind of — and that too in a certain city. So technically, it has no bearing on any footfall at all.
Tanay Gandhi
Got it, got it. Thanks. And I wanted to understand like I saw the other expenses were lower year-on-year and quarter-on-quarter basis. Was that in regarding some cost initiatives that you were doing or what is it specifically regarding?
Gaurav Sharma
No, so you know we have taken a very focused initiatives around reducing our other expenses. There are various line items in other expenses, including traveling, marketing, legal expenses, insurance expenses. In fact, we have renegotiated our insurance coverage for the entire company and there’s been a substantial cost-saving that has accrued to us. Again, on the marketing side, we have been very careful around what sort of marketing campaigns you want to run accordingly, the expenses have been curtailed. As a result of which you are seeing this flattish other expenses line-item in comparable cinema.
Tanay Gandhi
Okay. And final — final question, I think it was asked before by someone regarding the joint-venture. Did I miss the answer for that or just wanted some clarity on how it’s going to…
Sanjeev Kumar Bijli
No, so what was the question, if you could come again?
Tanay Gandhi
Yeah. The Devyani joint-venture, which you all were looking at the food cost. I’m not sure if all had answered it earlier, how it is and how is it going right now.
Sanjeev Kumar Bijli
Alok, would you like to take that one?
Alok Tandon
Yeah, I’ll take it off. And will you tell you that we are having this joint-venture under the name of Food Junction. So that’s the name given to the court. We’ve opened one in Kota and it’s just been a month since we opened it. The traction is good and the brands over there like KFC, Pizza Hut, Costa, they are doing well. But it’s too early to talk about it. The traction is there, is there and we’ll be expanding more in the next coming months.
Tanay Gandhi
Thank you so much. Those are all my questions. Thank you.
Operator
Thank you. The next question is from the line of Gaurav Gandhi from Glory Capital Management. Please go-ahead.
Gaurav Gandhi
Yeah. Thanks for the opportunity. Sir, what is your target percentage you wish to achieve in box office collection of regional movies? I mean, how much share of box office collection of a regional movie you are targeting from its overall business. Currently, as per the presentation for Bollywood movies, it is around 35% roughly that it’s our share. And for regional, it is around 12% to 13%. So now as we have good penetration in the Southern market, so what is your target? I mean, how do you look at this?
Sanjeev Kumar Bijli
So I think there is no specific target that we are having our overall strategy is to penetrate more in South India. South India is a very lucrative market. And today, despite of the highest regional mix that we have in our portfolio is towards South, the penetration in South is the lowest in terms of multiplex penetration. So incrementally, new screen additions that we do, almost 35% to 40% of new screen additions will be in South India. And South India as a market has been doing consistently well across all the four major languages. But I think to answer your question, there is no specific number that we are chasing, but we are prioritizing South of the region.
Gaurav Gandhi
Okay. Okay. All right, sir.
Sanjeev Kumar Bijli
Yes, thank you.
Operator
Thank you. The next question is from the line of Aditya Sen from RoboCapital. Please go-ahead.
Aditya Sen
Hi, thanks for the opportunity. Sir, I want to understand the occupancy part, like how — if I’m correct to frame like this, see, how many blockbuster movies do we need each quarter to get an occupancy rate of 28% to 30% or rather what are the factors that would lead us to the 28% to 30% occupancy rate? If you can answer it either ways.
Sanjeev Kumar Bijli
I think the occupancy is linked to supply of films and performance of films both. Unfortunately, the occupancy in the nine-month period has been trending low, partly because there was a drop-in the number of films which were released in both Hollywood and from Hindu film industry and also partly because of absence of big mega blockbusters from Hindu film industry. So I think going-forward, and we have seen months and quarters where the occupancy has been very strong. December was in fact the biggest — highest occupancy month for us where the occupancy was upwards of 30%. Again, going-forward with a very strong lineup in Hindi as well as English films, we feel that the momentum at box office will continue and the volatility on supply of films and occupancy that we witnessed over the course of last two years that should subside to a large extent.
Aditya Sen
Okay. So if December was 30%, then let’s say we get two very good movies per quarter, then that quarter can give us roughly 20% to 30% margin — sorry, occupancy rate. Is that correct understanding?
Sanjeev Kumar Bijli
There is no such formula actually you know we could have different concoctions. We could have all the films doing a mid-business but being solid and they would work. You could have one mega blockbuster that could work. It could have a — just a blockbuster film along with some fillers in the other week. So it really depends. It’s not such a linear answer to say what would drive occupancy.
But one thing that Gaurav said, having more films and films slotted for every week is really the crux and that’s the reason we are all very positive and hopeful that in the year ’25, ’26, we will get — the volume is going up dramatically across both Hindi and English. And because of which there will be no gap mix, the moment we have that scenario are in fact you know meaning on even blockbuster reduces because if every film, it’s like a cricket match, if everyone comes in just course 30-40 runs, you can still make 200 runs. And it’s not important that one guy has to come and hit a century. So while December was a month where Pushpa came and you know, really hit a double ton, but the reality is that if every player or every movie in this situation would come and perform antiquately at the box office, we still will get a very, very healthy occupancy rate.
Aditya Sen
All right. And do we have anything in the pipeline? Three releases.
Sanjeev Kumar Bijli
Yeah, about seven terms are getting released on 7th itself from to Jabby Met to Interstellar. Interstellar is one of the biggest Hollywood re-release that’s happening. So the re-release pattern has already been carved-out. This is a trend which is here to stay now. And there is a specific team which works along with program, does a lot of consumer research and polling and figures out content that should be re-release. So this trend is going to always stay and the — and the fact that pre-releases contributed close to over 4% of the total footfall is very, very encouraging.
Aditya Sen
Got it, sir. Thank you for your answer.
Sanjeev Kumar Bijli
Thank you.
Operator
Thank you, sir. The next question is from the line of Vaibhav Muley from YES Securities. Please go-ahead.
Vaibhav Muley
Hello, sir. Congratulations on a very good set of numbers for the quarter. My question was actually on the Q4 current performance in January. So how has been the response for the movies — key movies like Emergency, which were launched? And what is the expectation for the current quarter based on the lineup that we have? That’s the first question.
Sanjeev Kumar Bijli
I think you know quarter-four has started-off well. January, the — there were four films which were released, which crossed more than INR100 crores and three of them were from South India. South India, in fact, January is a big month due to, many big films are. Game-changer was a big film, which was released on 10th of January, which did very well at the box office, followed by a Telebu film. There was a — there is a film which is running in theaters again from film industry, which has done very well called some. And Sky from Hindi cinema has done more than INR20 box office, which was based on the weekend. So overall, January has done well. Of course, we have a couple of films like emergency that you mentioned did not do as per our expectations. Deva has not done as what we had thought it should do at the box office. But that’s the nature of the business. Few films don’t perform, but sometimes outperform expectations.
Overall, going-forward, I think there is a very strong lineup Chawa is releasing on 14th then Captain America is going to be break. Then there are there are series of regional films, there is a Ajit film which is today, then there is a Lal film, then there is a Naga Psychology movie in coming, which is coming in this month. Overall, the lineup for the month of Feb is extremely strong and March again is very strong. So I think this is a point we mentioned earlier as well. The lineup is consistently improving across languages, including regional, follywood and.
Vaibhav Muley
Understood, sir. My — actually next question was on the management contracts, our asset-light model that we are following. For the management contracts, if I’m not wrong, P&L won’t be on our books right, but the management fees that we will be generating around 10% of the revenues. Can we assume that this should improve our overall EBITDA margins?
Gaurav Sharma
See, overall EBITDA margins, yes, they will improve and ROCE will improve.
Vaibhav Muley
Okay, understood. And regarding our expansion in South, any kind of guidance that you can give on the screen additions? Given the regional things are doing very well?
Gaurav Sharma
Yeah, we’ve given an update on our growth strategy in the investor presentation uploaded on stock exchanges and our website where we have mentioned that we are on-track to open 110 new screens this year and a similar number of screens next year and we have signed about 100 screens under the new capitalized model, which will open over the course of next two to three years.
Vaibhav Muley
And how many screens of these total are expected to be opened in South market.
Gaurav Sharma
I think just to give you a ballpark incrementally new steam additions will be roughly about 35% to 40% in South India. That’s the sort of mix for South.
Vaibhav Muley
Okay, sir. And just last one question if I can squeeze in about the screen churn. So we have again closed I think 25 screens in the current quarter making total to 67 screens for nine months. Do you expect this screen churn to moderate going-forward or can we expect the churn to remain at the similar levels?
Sanjeev Kumar Bijli
So we continue to evaluate our portfolio very closely at a property-level. I think we have already exited 85 screens last year and already 67 have been exited so-far. So together in the two financial years, we have roughly exited about 160 underperforming screens. So most of these screens were located in malls which are dilapidated and we will live their life. But I think to answer your question, the pace in our view should come down, but we will have churn in the sense that we will replace older screens in older malls with new properties or new cinemas opening in better malls in the same-location?
Vaibhav Muley
Okay, sir. Understood. Thank you so much for the opportunity and all the best.
Sanjeev Kumar Bijli
Thank you.
Operator
Thank you. The next question is from the line of Umang Mehta from Kotak Securities. Please go-ahead.
Umang Mehta
Yeah. Hi, thanks for the opportunity. Sir, I just wanted some guidance on the capex for next year given that you would have a fair good visibility right now given service would kind of fit-out already.
Gaurav Sharma
Yeah, I think to answer your question on capex, for the current financial year, we will be sub INR400 crores in terms of our total capex expenditure versus INR625 that we did last financial year. So there is a 35% reduction in capex. And next year, while we are still in the process of doing our budgets and other planning. But overall capex spends will be a somewhere in the range of INR400 crores to INR500 crores. We will try to be very, very careful around our capex expenditure and be capital-efficient. At the same time, not sacrificing the growth in terms of new screen additions. So the new capitalized model will reduce capex intensity and our share of capex will come now incrementally.
Umang Mehta
Got it. And the second question was on rental renegotiation. Could you share some insights as to how many properties are currently seeing rentals consistently about 20% and how are the conversations going? And a related question was, is there any effort to convert some of the existing streams to contract. Just checking on that.
Sanjeev Kumar Bijli
Yeah. So you know the up till December, we have rationalized about INR50 crores of rental from the contracted rental. And to answer your second question, yes, you know as soon, there is an opportunity wherein the lock-in has expired or there is an opportunity or an interest from the developer, we do end-up converting the screen if it is viable from the straight lease model to the other models that are available.
Umang Mehta
Got it. Understood. Those were my questions.
Sanjeev Kumar Bijli
Thank you so much.
Operator
Thank you. We take the next question from the line of Raghav Bansal, an Individual investor. Please go-ahead.
Unidentified Participant
Hello. Good. Hi, good evening. I have a few short and quick questions. First, can you explain how the economics of the distribution model work, specifically for movies like Again and Skyport, how do we ensure we don’t make a loss there?
Sanjeev Kumar Bijli
Yeah. You know, we are — we’ve been in this business for more than 20 years and our strategy is to work with only big production houses with a credible track-record. And so we — our business team has that experience and expertise to assess the track-record of the director, producers, the actors and accordingly, we take a call on which films we want to distribute. Singham is a very successful franchise. And normally the way it works is that we pay an advance to the producer before the release of the film.
And once the film is released and the box office collections are there, we have — it’s a commission-based model. We take our commission, adjust the advance and pass back the balance to the producers. So the commission is anywhere between 6% to 9% of the total box office collections. So broadly that’s the business model. There is no out — we don’t work on outright purchase of rights for any title. It’s a purely commission-based distribution model.
Unidentified Participant
Got it. Second, how is the growth and expansion of 4,700 BC shaping up? And can it ever contribute significantly to the overall revenue in the coming years?
Sanjeev Kumar Bijli
Yeah, I think we are very excited about the brand. It’s shaping up extremely well. It is on its course to cross 100 crore revenues in this financial year. And it’s been growing at a very rapid pace of more than 25% top-line growth every year. It’s one of the very popular brands across commerce and modern retail channels. And you know, we want to scale it up even more aggressively as we move forward.
Unidentified Participant
Great. Third, a lot of times we see occupancy shoot up for movies with lower pricing. We launched dynamic pricing. Are we seeing any benefits there or can we be more aggressive with dynamic pricing?
Gaurav Sharma
Yeah, dynamic pricing it does work for us and we’ve tried it and it continues to give us a kind of a top-up on ATP on some of the bigger films during weekends. So it has a limited play and we also want to be very careful in deploying dynamic pricing because it somewhere goes against the grain of what the consumer is expecting. So while we’ve tried it, we want to be very conscious of where and how we use it. And typically in our business, sometimes we don’t know-how the movies will open up. That’s where dynamic pricing plays a very important role where we open low and if the film starts to getting popular, then at least we do not leave an opportunity or money on the table. We are able to maximize immediately within that show if the content starts to gain acceptance with the consumers.
Unidentified Participant
Right. Thank you. Finally, one suggestion from me. I’m a regular PVR customer. I go there every week. We need a very efficient, responsive and centralized customer support system for all the clients and feedback and queries that will be very helpful for us. Thank you.
Sanjeev Kumar Bijli
Sure. Okay.
Operator
Thank you. Ladies and gentlemen, we take that as the last question. I will now hand the conference over to Mr Gaurav, CFO, for closing comments.
Gaurav Sharma
So thank you all for joining us today. In case you have any incremental questions, you can reach-out to the IR team or to Saurabh and we look-forward to your support and keep you updated on the progress on its strategy. Thank you so much.
Operator
Thank you. On behalf of Axis Capital, that concludes this conference. Thank you for joining us and you may now disconnect your lines.