PVR INOX Ltd (NSE: PVRINOX) Q4 2026 Earnings Call dated May. 11, 2026
Corporate Participants:
Ajay Kumar Bijli — Managing Director
Gaurav Sharma — Chief Financial Officer
Gautam Dutta — Chief Executive Officer, Revenue & Operations
Analysts:
Jayram Shetty — Analyst
Abneesh Roy — Analyst
Umang Mehta — Analyst
Harit Kapoor — Analyst
Arun Prasath — Analyst
Jinesh Joshi — Analyst
Sameer Gupta — Analyst
Parag Thakkar — Analyst
Kavish Parekh — Analyst
Saurabh Beria — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the PVR INOX Limited Q4FY26 Earnings Conference Call, hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on Touchstone phone. Please note that this conference is being recorded.
I now have the conference over to your Mr. Jayram Shetty from ICICI Securities. Thank you. And over to you sir.
Jayram Shetty — Analyst
Good afternoon everyone. I welcome you all to PVR INOX Quarter 4 FY26 earnings call. The call will start with brief management remarks on the earning performance followed by interactive Q&A session. PVR INOX management will be represented by Mr. Ajay Bijli, Managing Director; Mr. Sanjeev Kumar, Executive Director; Mr. Gaurav Sharma, CFO, and other senior management personnel. Over to you sir.
Ajay Kumar Bijli — Managing Director
Good evening everyone. This is Ajay Bijli. Like to welcome you to discuss the audited results for the quarter and the year ending March 31, 2026. The earnings presentation and results were uploaded to our website and the stock exchanges earlier today and I hope you’ve had a chance to review them. FY26 was a defining year for PVR INOX. We delivered our best ever financial performance, brought net debt to a negligible level and pivoted decisively to a capital light growth model. Even as the Indian box office reached an all time high.
Today, PVR Inox is structurally stronger than at any point in our history. Within India’s exhibition industry, PVR Inox stands apart as a well loved consumer brand with unmatched market leadership and scale. Today we operate nearly 40% of the country’s multiplex screens and capture 31% of India’s box office. With prime locations, premium formats and the trust audiences place in our brand. We are the preferred partner for India’s leading mall developers and top film producers. And the industry we lead is itself on a strong long term trajectory.
India’s box office has grown at a 7 to 8% compounded growth rate over the last decade reflecting the sustained structural demand for movie watching in cinemas. Theatrical first is now firmly the dominant release model as producers and OTT platforms alike recognize that theatrical performance sets the quantitative and the qualitative benchmark for a film. Against this backdrop, FY26 was the strongest year in the industry’s history with collections rising 11% to 13,519 crores the standout was a resurgence of original Hindi cinema with Bollywood collections growing 55% year on year, delivering its best year ever.
English cinema also delivered a strong year growing 54% on a robust fleet of Hollywood releases. Another big positive trend in FY26 was a solid comeback of mid scale films grossing between 100 to 200 crores which saw its share rising from 12 to 20%. Growth is now broader, more resilient and less dependent on a handful of mega blockbusters coming to our performance. Q4FY26 recorded our highest ever 4th quarter collection supported by titles like Durandal, the Revenge, Border 2 Project, Hail Mary amongst others.
We welcomed 31 million guests in the quarter and 150 million across the year which is a 10% growth over FY25. ETP for the year stood at 280 rupees which is up by 8% compared to previous year and SPH at 147 compared up by 10%. Both record highs in Q4. ATP touched 315 rupees and SPH 165 on an India’s 1 month 16 adjusted basis. FY26 revenues was a record of 6,742 crores up 16% year on year. EBITDA the four exceptional items doubled to. 968 crores with margins expanding from 8.4% to 14.4% reflecting both strong revenue growth and the cost discipline we have sustained for several years.
FY26 also recorded the highest ever pack at 386 crores against a loss of 152 crores in FY25 for quarter four revenue grew 25% to 1577 crores. EBITDA rose nearly six fold, 269 crores and PAT was 178 crores versus a loss of about 10 crores 106 crores. PAT for Q4.26 and fiscal 2026 also included gains on the divestment of 47 BC to Marico. On growth our model has pivoted decisively to Capital light. Of the 93 new screens added in FY26, 55% came under capital light formats with around 44% of additions in under penetrated South India screen exits dropped sharply to 18 from 72 last year as the post merger portfolio rationalization is largely behind us.
Assigned capital light pipeline now stands at 138 screens, 52 under FOCO and 86 under asset light. Capex intensity is down 24% year on year basis. Robust operating performance Sustained cost discipline and reduced capital intensity have driven consistent free cash flow generation over the past three years. With FY26 free cash flow reaching an all time high of of 790 crores. This cash flow has been deployed towards debt reduction thereby strengthening the balance sheet. Our net debt now is nearly down 90% since the merger to a negligible level of INR161 crores as of 31 March 2026.
Return on capital employed has improved to 10.2% in FY26, a clear breakout and we will continue to work towards improving it further. Looking ahead, FY27 content pipeline is broad and diverse across Hindi, English and Indian cinema, giving us strong confidence in the trajectory on the Hindi front. Anticipated titles include Cocktail 2, Damal 4, welcome to the Jungle, Avara Pan 2, Ramayana Part 1, King, Love and War and with several other films also lined up, regional cinema continues to offer exciting content lineup like Petty, Toxic, Jailer, Tool Spirit amongst others, Hollywood is lined up with Master of the Universe, Toy Story 5, the Odyssey, Spider Man, Brand New Day, Avengers, Doomsday and many others.
We enter FY27 with the strongest balance sheet in our history, an exciting and diverse content state, a strong pipeline of new screen signings and an industry tailwind that is structurally stronger. We are confident the next chapter will compound on what we delivered this year.
With that I open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question answer session. Anyone who wishes to ask the question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
We have first question from the line of Abneesh Roy from Nuvama. Please go ahead.
Abneesh Roy
Thank you and congrats on fantastic debt reduction. So that will be my first question in terms of debt. Obviously now it is negligible. So what will be your expectation given light asset strategy going ahead in next year, FY27 also what kind of screen addition you expect, what kind of own screen versus the low effect model and what would be the plan once you have net cash, would you like to start dividend also?
Ajay Kumar Bijli
Well firstly the pipeline about 120 odd screens visibility we have to open we have that we’ll be opening next year and the percentage of screens opening in focal and asset light model was 55% this year it will continue to be between 55 to 60%. And so that is your first question. And secondly with the kind of lineup and that we are looking at I think we will continue to have healthy cash flows. And definitely we want to get into a situation where we are cash positive. And of course then the board will meet and decide what should be done with the approvals. We haven’t given it much thought at the moment. Gaurav would like to add something to it.
Gaurav Sharma
I think you’ve covered all the key points and nothing incremental.
Abneesh Roy
Sure. My second question is slightly on the macro side. So two parts to that. One of course Prime Minister has said yesterday not to buy too much gold jewelry next one year and not to travel outside also. Now obviously diesel and petrol price hike is just a event which will happen very quickly. Now do you expect some kind of a consumption impact on multiplex green? Also given urban disposal income can get impacted. And slightly related question, one of the key South Indian state now has a chief minister who is a obviously one of the biggest hero. So any possible positive news either in that state or any of the other state, any positive regulatory you expect in the medium long term? Not asking immediate because these things can’t be predicted.
Ajay Kumar Bijli
Yeah, I mean firstly I must tell you that obviously it’s not very. If the macroeconomic scenario is something that the PM has spoken about and asked to take certain austere measures that’s all due to the West Asia crisis. And obviously that doesn’t sound that good overall. But having said that, history has shown that cinema being still a very small ticket size if you look at TVR is ATP is 280. And overall if you look at India, India is maybe the average ticket price is somewhere between 150 maybe if you look at all the single screens, multiplexes which are there, it’s still a very average Transaction size is 2 to 2.5 when people go and watch a movie.
Typically history has shown that. I don’t want to use the word recession but I’m just saying in challenging times cinema going actually benefits. People do go out and then they eliminate all other discretionary spends of traveling and other things that they do leisure activities. But cinema generally bounces back and people do like to entertain themselves in the cinema. So I’m not saying that it’s good what is happening as an impact of West Indonesia crisis. But we do not directly see that there will be any impact to our own business due to this.
Abneesh Roy
And on Tamil Nadu or any of the other state, anything positive you expect given regulatory changes government…
Ajay Kumar Bijli
It is too early just I think only today is become the CM. There is no, I don’t think that is probably number one on his agenda just now. So we don’t know of any regulatory positive or what kind of news is going to come out of Tamil Nadu.
Abneesh Roy
Last quick question. If I see your revenue stream, advertising seems to have been the slowest growth. Obviously now there will be margin pressure for all corporate advertisers and even non corporate advertisers in Q1 and possibly Q2. So what is the outlook on that? And when I analyze IPL in cities where IPL has been held and cities where non, there’s no IPL actual match. Have you seen box office performance different because say in Bombay there is an IPL match obviously customer has a choice. But in a cities like Patna where there’s no IPL match or say any other city like that, are you seeing box office growth in Q4 where IPL has been there a bit faster than such cities?
Ajay Kumar Bijli
No, I think IPL completely has no impact on cinema going at all. We have seen no correlation. So many movies have got released in the last few weeks ever since IPL has started. Whether in the city where it is being played or in any case the city in which it is being played. There is only so much capacity that city can take in its stadium and all these cities are pretty populated. And I think both of these things are very different forms of entertainment. Those who want to watch cricket, they watch cricket. Those who want to go and watch a movie, they watch a movie. So I don’t think one eats into the other at all. We haven’t seen any evidence of that.
And as far as advertising is concerned, I will let Gautam Dutta, our CEO answer you address that question for you about the impact of any challenge in times on advertising revenues. Would like to answer that.
Gautam Dutta
Yeah. Yeah. So thank you so much. First and foremost I would want to also add on IPL. We are also screening quarter finals, semifinals and the finals in our cinemas and completely validated what Mr. Bijli said that there is absolutely zero impact. In fact it plays pretty well for us and there’s been absolutely zero impact on advertising. Just to while these numbers are a bit subdued, most of our growth this year also came in from a lot of sleeper hits which became really really big at the box office which was great news.
And they were about two or three big blockbuster films like Janagayan and Toxic was technically moved if those two films would have got released because they were a Pongal release and then Early Jan release that would have actually helped us to register at least 7,8% growth on advertising. So largely we are on track. It’s just that some of the big blockbusters moving has kind of impacted and whenever a movie moves there is a bit of a vacuum that gets created. Created and because of which this happened.
But having said that, this year seems to be a very balanced year both in terms of Bollywood, Hollywood as well as regional. And while the primary growth in advertising the way we are seeing will come in H2 simply because of the mega title getting released in October, November, December, period. But we are well poised this year to be on our projected growth path as we have shown over the last so many years. And there would be no deviation there.
Abneesh Roy
Sure. Thank you. That’s all from my side.
Operator
Thank you. We have next question from the line of Umang Mehta from Kotak Securities. Please go ahead.
Umang Mehta
Hi. Thanks for the opportunity and congrats on a strong year. My first question is on the pipeline. So currently based on whatever in the pipeline, what’s the conviction in terms of footfall growth or occupancy for F27? Any guess you can highlight for us?
Ajay Kumar Bijli
You’re talking about the pipeline of this full year?
Umang Mehta
Yes. F27.
Ajay Kumar Bijli
Yeah. I mean I can start from this quarter itself. You’ve got, you know, you’ve got this patipatny a coming and then you’ve got, you know, later on. So many films. Odyssey is there. Ramayana is a big one. Addition three is coming. You’ve got Damal, you’ve got welcome to the Jungle. You’ve got Cocktail two. There’s a, you know, movie called Shan Mehra Dil which is coming. And later on big movies like Odyssey in Hollywood films, you’ve got this time, Star Wars, Toy Story, you’ve got Evil Dead. Odyssey is a very big one.
Spider man is coming. Dune 3 is coming. Avengers, which is always very big in India, Jumanji, a lot of regional movies. I mean Toxic is bound to come this year. There was a gentleman who was asking the question about the chief minister of newly appointed chief minister of Tamil Nadu. His movie is coming and that’s got a very good traction. Teddy is coming. Gabru of what do you call Sunnydale is coming. So plenty of movies I can rattle off the entire lineup. But I think this should be enough. We’re okay with it.
Umang Mehta
So in this, on this like, given this backdrop, are you confident that occupancy levels will keep inching up? You know, maybe penciling mode 27 plus for F27 or how are you thinking internally? I mean…
Ajay Kumar Bijli
The trend is only that it goes up. And I’ve been talking to a lot of people about the macro Picture of India. 1500 films get released every year. So you know, movie by movie. If one movie does well, one doesn’t do well. Doesn’t matter to us that much on an overall basis. I think there’s a CAGR growth of 8% in the Indian box office. Our occupancies are increasing. The number of films which are the bracket of 100 to 200 crore movies is only increasing every year. The bracket of 500 plus movies has only been increasing post Covid.
So obviously all these factors, more and more investment is being made by the film fraternity into movies for the big screen. If you look at OTT versus exhibition, there was an EY report which basically just got released where in calendar year 2022, 217 movies first came to the theatres and 105 came to OTT. This year 470 have come to theatrical and only 30 have gone to Ottoman. So theater first model is a very clear model for all the producers. So I think there is no reason for us to not be optimistic that occupancies from now on are only going to improve.
Umang Mehta
Sure sir, thanks for that. The second question was on one of your growth vectors which you mentioned about tier 2 and below cities. So any update you can share on the smart screens pilot which you are kind of learning.
Ajay Kumar Bijli
I think by July 15th a couple of pilots will open. I think we’re calling them pilots. They’re very confident because these are in good cities, good deals have been signed by the developers, demographic studies have been done. So by July 15, mid July, at least two of them will open. And we’re hoping to open close to 28 to 30 screens under this model.
Umang Mehta
In S27 or over the next year.
Ajay Kumar Bijli
This financial year.
Umang Mehta
Got it. And just two bookkeeping questions for Gaurav. So one is the CapEx outlook. I mean if you can share a ballpark range for next year. And what was the management fee income in F26 from the focus please.
Gaurav Sharma
So next year, I mean financial year 27 we expect around 375 to 400 crores of overall capex which will be sent across new projects as well as renovation of some of our high value cinemas. And our management income has been a sharp increase even though at an absolute level it is about close to 10 crores for financial year 26. But on a run rate level it is at about 13 to 14 crores per annum and it’s growing.
Umang Mehta
Got it. Thanks so much. All the best.
Ajay Kumar Bijli
Thank you.
Operator
Thank you. We have next question from the line of Harit Kapoor from Investec. Please go ahead.
Harit Kapoor
So the first question was just to get your sense on the capital-light model. If you could just help us understand that what is the number that you currently have already in this model and incrementally, you know what’s the kind of within the 120 screen pipeline what that number looks like going forward? That’s the first question.
And the second one was on the rental side. So I’ve seen that there is some reduction as the rent as a percentage of sales starting to kind of come down as maybe capital life model kicking in as well as some operating leverage that you’re getting on revenue. Just wanted to understand that over a two, three year period once this capital-light piece picks up as well, what kind of basis point savings one can think of in this line item which is your largest opex line item? Thanks.
Ajay Kumar Bijli
Gaurav, would you like to answer this?
Gaurav Sharma
Sure. So Harith, I think we’ve given that data as part of our investor presentation as well. In current in financial year 26 overall we have added about 51 screens under capital light model of which 29 were asset light where developer contribution was and 22 screens were under Foco model where you know it was completely franchisee owned and company operated. Overall I think going forward we have about 138 screens which are signed under capital light of which 52 are under FOCO model and about 86 are under asset light.
So that’s one second in terms of going forward. Our rental cost of course in capital light model and franchisee model is going to be lower as compared to cinemas where we invest our entire capex and that appears in our P&L At this stage it’s hard for us to give a guidance on what exact percentage drop that will happen in terms of percentage of revenue. But overall the trend will be on asset light will be on the lower side.
Harit Kapoor
And just to follow up is that this 138 number that you mentioned that gets executed over what period of time?
Gaurav Sharma
This will get executed over next 18 months.
Harit Kapoor
Okay. Okay, next question. Great. I’ll come back to both. Thank you.
Operator
Thank you. We have next question from the line of Arun Prasath from Avendus Spark. Please go ahead.
Arun Prasath
Good evening everyone. Thank you for the opportunity. My first question is on this satellite model. I understand in diversifying the risk of content but what I’m trying to understand is now that we have a Very neat balance sheet. Our constraint on balance sheet is not there and unless and until we go for a very large number of screens, how is the data model helping us? Because the way I’m seeing is that your screens count is increasing but your capital deployed capex deployed is decreasing which will be at this point of time because we have enough resources. So can I just throw a light of what is our objective of doing a satellite model going forward? If we have enough resources, if you are generating enough operating cash flows and we don’t have any restrictions because of the balance sheet debt constraints?
Ajay Kumar Bijli
Satellite model and the FOCO model is straight away your ROC has improved dramatically. So I think beyond a point, if you look at our entire circuit, I mean this we just started about three years ago. I mean of course we had some properties under management earlier on but I think because the brand is now recognized and everywhere, I think sweating the brand is something that is a very natural progression for any brand to do so. In the hospitality sector, retail sector and even in some of the restaurant F&D sector this is something which is very common.
So you have a healthy balance of growing with your own capex as well and at the same time wherever the opportunity lies to improve your ROCEs, you should be looking at this model as well. And I think even if we have cash flows it doesn’t matter. They have to be deployed on our own expenditure number one. Number two, screen expansion of 120 to 150 screens in a year is quite healthy because we still want to have unit level economics working both for us and the developers who are spending the money.
So always PV and INOX has been very careful about our screen expansion strategy. Not for the heck of it, we should just put screens everywhere. Wherever the demographics are correct, market dynamics are correct, where we get a good deal is where we want to grow. So unit level economics have to make sense. And given the pace of shopping centers and malls and opportunities in the smaller towns, I think growing the 100 odd screens every year is still pretty healthy. Gaurav, you’d like to add something more?
Gaurav Sharma
No, nothing infinitely sir.
Arun Prasath
One just clarification. The unit economics of the screen is not dictated by who funds the capex. So obviously ROIC at the property level is not going to change because of we putting in a satellite or obviously under balance sheet it makes a difference but as long as that unit economics works in a particular catchment area and ROIC is not going to be different because of what group and the capex. So ideally if we have enough balance, unless until As I said, the mall supply is so high and we can’t be catering to all those screens by ourselves then asset like makes sense to me just bit more in one sense of why we are doing this. If you have enough balance sheet is what my original question is.
Ajay Kumar Bijli
Gaurav. I’ll leave it to you to answer that.
Gaurav Sharma
I think you know as Mr. Bijli explained earlier, the strategy is not to use our own capex, use our own capital to open every screen. I think the idea of the merger that we did three years back was to create market leadership, a strong brand that we can leverage vis a vis the new screen additions. What we are saying is that our new screens will be a healthy mix of these models where we will put in our own capex. Especially in markets where there’s high competitive intensity particularly in south India and in other markets in the country where there is, you know, we have good market share and a very strong brand and the competitive intensity is less.
We would like to partner with the developers with capital contribution and also do only franchise deals. The whole idea is that we fund our growth through our own internal accruals rather than using capex and borrow through debt and grow and use the strength of our balance sheet to fund the growth for future. It also helps to improve the return metrics and that’s quite visible when we look at the numbers that we reported in financial year 26.
Arun Prasath
Okay, so which means simply what it implies is if we are going to steady state, generate an operating cash flow of north of 700800 crores, ideally we should put all this in to the deployment and develop more screens. That is a, this is what we can expect in a steady state basis. So because India is so under penetrated market in terms of screens.
Gaurav Sharma
You know you — there has to be enough opportunities and unit economics should stack up for that location, for that mall, for a multiplex to be operating. So it’s a combination of multiple factors.
Ajay Kumar Bijli
And you know, basically screen expansion is not getting compromised because of asset light and focal model. Screen expansion is completely robust and wherever there is a good opportunity we’re just utilizing our capital in such a manner that there is, we are being prudent about how to utilize our capital. That’s all we’re doing. We’re not compromised just because we’re doing focal and, and asset light. It is not compromising on the screen growth strategy that continues to remain. Whatever opportunities which are coming our way and then if we evaluate it and the unit level economics work, we basically are grabbing onto it. What model we Work it in is not going to compromise on the screen growth, the percentage growth we want to increase.
Arun Prasath
Understood. Thanks for clarification on this. All the best.
Operator
Thank you. We have next question from the line of Mr. Jinesh Joshi from PL Capital. Please go ahead.
Jinesh Joshi
Yeah, thanks for the opportunity and congrats on the balance sheet improvement. Just one observation on the balance sheet side. I see that our ROU asset has come down from about 4900 crores in FY25 to about 4600 crores in FY26. But correspondingly we have added about 42 odd screws on lease basis and about 29 on asset light basis. Which effectively means that there has to be some capitalization on the balance sheet with respect to these screens. So just wanted to know why the ROE figure has come down when we have had three additions in 26.
Gaurav Sharma
So ROU, as you know, ROU assets depreciate over time and simply because the depreciation over the last one year has been more than the gross additions in the ROU on these model streams. That’s why there is a drop in ROU assets. Because if you add, if you add focus screens and asset light screens, the contribution of these screens on ROU assets is much smaller than a fully leased sort of screen additions.
Jinesh Joshi
Do we also capitalize focus groups? My understanding of that under that model the PLL belongs to the developer and not us.
Gaurav Sharma
We don’t capitalize.
Ajay Kumar Bijli
Sorry Gaurav, you go ahead. Yeah.
Gaurav Sharma
We don’t capitalize focus screens on our books.
Jinesh Joshi
Okay. And…
Ajay Kumar Bijli
Model belongs to us and belongs to the company in the asset light model, whether the developer contribution, the P&L is ours.
Jinesh Joshi
Right, Right. And secondly, I just wanted some clarification on the CAPEX figure that you mentioned for FY27. If I heard you right, you have given a figure of about 375 400crores and we plan to open about 123s and 27 whereby 55 to 60% will be on the SOFO and the asset light model where typically our CT’s commitment has to be very negligible. So just wanted to understand why this figure is high. I understand we have renovations as well which you highlighted in the opening remarks. But if you can break this number into new organic capex and renovations, it will be really helpful.
Gaurav Sharma
Yes, I think roughly around, you know, about 225 to 250 crores we will spend on new projects which will be, you know, across payments which are due for projects which are under fit out as well as new handovers. That we’ll take the year and about 80 to 100 crores will be spent on renovation. And the balance we will spend on maintenance and IT.
Jinesh Joshi
Got that one last question from my side. In FY26 we closed about 18. I believe we have had some closures in FY25 as well. Just wanted to get some sense. Have any of these properties that we have vacated, have they been occupied by any of the few things? Give some color on that.
Ajay Kumar Bijli
Some of, you know, some of the malls themselves are very decrepit and they did not have any potential at all to be revived, you know, because, you know, PBR itself started in 97. Inox started in 2000. So some of these malls and users are, you know, 20 years, I mean say 15, 16 years in existence. 20 years in existence. So they’ve been replaced by newer malls and newer multiplexes in the same demographic by us only. So we’ve only moved to a better mall, better destination. And in certain cases the malls have been converted into other users and some malls have closed down in certain. Some operators have taken it. But from our scheme of things, it did not make sense for us to grow continue on those properties.
Jinesh Joshi
Okay, thank you. Thank you so much and all the best.
Operator
Thank you. A reminder to all the participants, please ask your. Please restrict yourself to two per questions. We have next question from the line of Sameer Gupta from IIFL Capital. Please go ahead.
Sameer Gupta
Hi sir. And thanks for taking my question. Sir, I had a broader industry question. Now this is regarding industry footfalls and occupancy. What I understand is that FY26 has been quite a normal year in terms of say Hollywood coming back OTT heat normalizing. And we have seen that evidence in terms of direct OTT releases and so on. Also overall consumption across the board has been picking up. When I look at our occupancy level of 25.8%, this is very similar to 23, 24 levels. So what gives us the confidence that this is still not the new normal post Covid.
And there can still be improvement. I understand content lineup, but quite frankly there are like 15002000 releases in a year. I mean 50 hundred will be of good quality is the general consensus.
Ajay Kumar Bijli
26.2 is what we close the year on.
Sameer Gupta
Oh, okay, sir. But still, the question still remains.
Ajay Kumar Bijli
Yeah, yeah, yeah. So it’s a, you know, so every year there are explainable reasons. This particular year, I think February was not very good Diwali, which is an aberration. Normally you have big Diwali releases So that didn’t happen. But I think we’re moving in the right direction of more and more movies coming on the big screen. More and more people preferring to watch it on the big screen than any other format. So I see no pessimism or skepticism to think that this occupancy level will level does not come up.
Secondly, we are not just we are looking at occupancy levels at one level, but we are also looking at our costs. So that Even at say 27, 28% occupancy, we are able to get the same EBITDA margin that we were getting pre Covid. And of course if it does go to 31, 32% occupancy, then you are bound to get much better margins than what even what we were getting pre Covid because of our cost efficiency that we are achieving post the merger. And optimism is also coming from the lineup. Optimism is coming from the fact that more and more filmmakers are making film for the big screen. Not just in India, but India, when I say Hindi, regional and also Hollywood.
Sameer Gupta
Got it, sir. But is there evidence now that the OTT heat is now behind and this is the new normal or there is still some bit of story left there, as in there is still a fatigue associated with OTT that might come in future or that has largely played out?
Ajay Kumar Bijli
It’s played out. It is always a. It was never a substitute. It only became a substitute during the COVID period. Obviously when cinemas are shut, it was always something complementary. Home entertainment has always been complementary TV shows. People watch it wrong when it comes to movies. The first platform where movies are monetized and seen has always been big screen. So I think this debate is quite hackneyed and outdated now. And there is enough evidence also about the degrowth of OTT and the growth in people going out and watching movies on the big screen.
Sameer Gupta
Got it, sir. Assessment here is that pickup from here on is more driven by macro factors and not specifically to PVR, INOX or the cinema industry as a whole, but more to do with macro factors. Is that a correct interpretation?
Ajay Kumar Bijli
Very much due to the. Because cinema is very much in the cultural fabric of our country, you know, cinema going. So macro factors can be anything but this is. I’m specifically talking about the film industry and in the film industry, all the stakeholders, which are the filmmakers, the OTT platform, the consumers, the mall developers, everybody is now making way for theatrical. So I think the fundamentals of business have always been strong. That’s the reason why the growth in box office numbers are there.
This year, the 13,395, whatever calendar year has been the highest ever. And also PBR is not just a passive brand, it’s a very active brand. We have got the best locations in the country. We are proactively doing so many marketing activities to make sure people come to our cinema. So PBR does get a delta over any other operator, any other cinema chain because of the way we position ourselves. So I think it is not just macro, it is a lot of proactive effort that PV Inox makes. And also because of the way the film industry is currently poised, the fact that movies are doing so well at the box office, that fact is not lost out on any of the filmmakers. Because there is no cap to how much a movie can earn when it gets released on the big screen. Smaller movies like Sanyara Mahabhar, Narasimha Lajo, all these movies were small to medium budget movies. And look at the box office collections they have got.
Sameer Gupta
Got it sir. That’s all for me. Thanks again and all the best. Yeah.
Operator
Thank you. We have next question from the line of Parag Thakkar from Fort Capital. Please go ahead.
Parag Thakkar
Yeah. Hi sir. Thanks a lot for giving opportunity and thanks a lot for a very good performance. I would like to ask that. See, fundamentally speaking, our stock is completely undervalued. And now of course as you rightly said, the trend is changing from last six months. We are seeing good footfalls. So. And you are generating so much of operating cash flow and your capex is limited. So why would you not consider a buyback? Because if you remember during COVID also it is a QIP at around about 1300 rupees and still the stock price is below that even after such successful movies. So — and you are saying that pipeline is also looking very robust. So why a buyback where promoter will not participate is not an option as a capital allocation decision. Now that your net debt is just 160 crores.
Ajay Kumar Bijli
Gaurav?
Gaurav Sharma
Sure. So Mr. Thakkar, I think you know, we have been on the journey of deleveraging over the course of last two, three years. As you’ve seen, our net debt levels have come down by almost 90% since the merger time and we are now negligible net debt. I think the first goal objective for the company is to become positive net cash which is looking very likely in the near future. And I think once that is achieved at the, you know, under the guidance and discussions with the board members and you know, we will also discuss the capital allocation priorities and objectives of the company. Post that at this stage. Yes, it is definitely One of the things which is there in the list but at this stage we don’t have any incremental guidance to offer.
Parag Thakkar
Okay, sir, it is my genuine request that once you add net cash, I think because the stock is completely undervalued based on the fundamentals and of course the stock has not revolved shareholders because of the reasons which were not in your hand. But now that the tide is turning, I would seriously recommend that we should go for a buyback.
Gaurav Sharma
Sure. Thank you so much.
Ajay Kumar Bijli
And I said nothing is off the table.
Parag Thakkar
Thanks. Thanks. Thanks.
Operator
Thank you. We have next question from the line of Kavish Parekh from 360 ONE Capital. Please go ahead.
Kavish Parekh
Team. Thanks for the opportunity and congratulations on a good set of numbers. Your initial capitalized screens are now almost 8, 10 months old. How would you assess the progress on this initiative so far across both the focal appetite models? What have been the key learning, positive challenges or areas where further improvement is required? And could you also quantify the margins you are generating on such screens today?
Ajay Kumar Bijli
Yeah, Gaurav, can you answer that?
Gaurav Sharma
I think we’ve had very strong response on both franchisee as well as Asset Light models on the franchisee screens. There has been a very strong response especially in tier 2 and tier 3 towns. A lot of cinemas that we have opened in the recent past, for example in Siliguri, Gangtok, Agra, Leh, they have been all franchisee deals and the performance has been pretty strong. The response from the local partner that we have given the franchisee to has been satisfied and the overall growth in the management fee on a run rate basis has been upwards of 40 to 50% even though on an absolute basis it is still a small portion of our total top line because we have almost 1750-1800 screens on the lease basis.
Asset Light, which is where we partner with the developer, where developer contributes anywhere between 42 80% of the capex. Again, there are a few cinemas we’ve opened in the last one year under that model and we are yet to see one full year of operations. But so far I think the earliest one that we opened was last year sometime in the month of April and May and which has completed one full year of operations and the performance has been pretty healthy. ROCs are in line with what we had estimated at the time of feasibility of those cinemas. As we open more cinemas and Asset Light approach, we will also learn about how they are performing and overall response from the developer partners there.
Kavish Parekh
Got it. And on the expansion plan, 75 net schemes added this year. What is the plan for F27 in terms of growth additions, would it be around. Apologies if I missed such number earlier.
Gaurav Sharma
That’s right.
Ajay Kumar Bijli
Expansion will be continuing to be over 100 screens. Some will be through this model of focal and asset light. Some will be. We will be spending our own money. A lot of focus on tier 2, tier 3 sort of cities as well. With our smart cinema initiative which is, I think the first one will open by mid July. So we are expanding in those smaller towns as well. And of course big cities continue to surprise us because the CBD keeps changing. New and more shopping centers continue to come in cities like Bangalore, Bombay, Hyderabad, Chandigarh, Kolkata, Surat and big developers like Phoenix, Prestige, DLS, Obroy Realty, Nexus Malls.
They continue to expand into various regions and various cities. So we are very much their preferred partner with most of the, in fact all of the top developers in the country today. So they are continuing to have shopping centers and having spaces allocated for cinemas.
Kavish Parekh
Sure. And on a CapEx basis, on the CapEx front, what would be the average CapEx per screen on the smart screen model, the one that you plan to ramp up in tier 2, tier 3?
Ajay Kumar Bijli
Gaurav, would you give the comparison between normal screen and…
Gaurav Sharma
Yeah, roughly, you know, for smart screens that we want to open up in tier 2, tier 3 locations, the offering will be more affordable both in terms of capex and more cost efficient in terms of operations. So we expect that our per screen capex for a smart screen will be at least 30 to 40% lower than mainstream cinema in that same location. So depending on where we open, it will be about 30 to 40% lower.
Kavish Parekh
Got it. And last question, on the net position, stellar net reduction over the full year from here on, what is the top? You have a cash balance of about 6 billion. Gross debt for about 7 and a half. Do you plan to pare it gradually while holding on to cash or will there be accelerated payments? On the gross debt front, of course, as you mentioned, dividends could be considered at some point in the future. But what is the intended use of cash here with respect to debt?
Gaurav Sharma
I think in the near term we will use it to further bring down the gross debt. Our gross Debt as of 31st March is around 706, 60 crores. And we intend to bring it down to about 500 crore levels. And in the last year we prepaid a lot of our term loans. We will continue to prepay some of the term loans and some loans will, you know, with the flux of time will get, you know, will get reduced. So we want to bring it down to about 500 crore levels at a gross debt.
Kavish Parekh
Net debt coming down to zero is a possibility might say 1 HF27?
Gaurav Sharma
Yes well I would not like to comment on the exact timelines but in you know near term it’s definitely on the horizon.
Kavish Parekh
Sure. Thank you so much and all the best.
Ajay Kumar Bijli
Thank you.
Operator
Thank you. We have next question from the line now Saurabh Beria from Sameeksha Capital. Please go ahead.
Saurabh Beria
Hi. First of all congratulations on the great set of numbers I wanted to understand some unit economics on the new model first of all for say the POCO models we are not contributing on the JPEG side so on the console basis we are not even adding the top line revenues in our top line so what exactly do we combine in a P&L? The management fee and is that on a fixed basis or what is the proportion? And secondly same on the asset like structure for say they are contributing 50% so do we add the entire into the REU assets and then what do we book in the P&L? So I wanted to understand on this part.
Gaurav Sharma
Sure. So on the FOCO Model we only book the management fee we don’t consolidate the P and L of the property the P and L is retained by the landlord and the management fee, you know varies between 10% to 14% of the top line of the cinema that’s how we record the financials in our books. On the asset light model where there is a contribution coming from the landlord anywhere between 40% to 80% of the overall cinema capex depend, you know, depending on how much the developer contributes we you know work out a arrangement of yield on his investment so that you know the balance capex which comes to our account which is, you know, let’s say 40, 50% is something that we capitalize in our books and gets you know recorded as ROU assets and and lease liabilities and you know the entire P&L is consolidated the yield that we pay is in the form of rentals and appears as a rental expense in our P&L.
Saurabh Beria
Okay, perfect. Another thing, just confirm if I’m right On the focus side if you’re not adding incremental capex and getting a pitch top line of their revenue so this is the way we improve our right going forward, right?
Gaurav Sharma
Sorry I missed your last part of the question can you repeat it?
Saurabh Beria
If we are not contributing capex on the POCO side and we are getting top line added to our revenue their share and so this is the way our oil improves going forward, right?
Gaurav Sharma
Yeah the management fee gets recorded in our P&L. So you know, if you know, let’s say this year for example we have added about close to 18 or 19 focal screens. So we just get management fee in our P&L and incrementally whatever focal we add the revenues are recorded. There is no cost to it.
Saurabh Beria
But we do operate. So there is some employee cost incurred by PVR?
Gaurav Sharma
As I explained earlier the P&L is with the landlord.
Ajay Kumar Bijli
Yeah.
Saurabh Beria
So we incur no expense on the purpose change?
Ajay Kumar Bijli
No, no, not CapEx, not OpEx.
Saurabh Beria
Okay, thank you. Thank you.
Operator
Ladies and gentlemen, this will be the last question. I would like to hand the conference over to management for closing comments.
Gaurav Sharma
Thank you all for joining this management earnings call for quarter four and FY26. And if you have any further questions you may reach out to me or my colleagues in the investor relations department. Thank you once again for joining this call.
Ajay Kumar Bijli
Thanks. Thanks.
Operator
Ladies and gentlemen, on behalf of ICICI securities that conclude this conference. Thank you for joining us and you may not disconnect lines. Thank you.