PVR Limited (PVR) Q2 FY23 Earnings Concall Transcript

PVR Limited (NSE: PVR) Q2 FY23 Earnings Concall dated Oct. 17, 2022

Corporate Participants:

Ankur Periwal — Senior Vice President of Axis Capital Limited

Ajay Bijli — Chairman & Managing Director

Kamal Gianchandani — Chief of Business Planning and Strategy & Chief Executive Officer of PVR Pictures

Sanjeev Kumar — Joint Managing Director

Gautam Dutta — Chief Executive Officer

Nitin Sood — Chief Financial Officer

Analysts:

Abneesh Roy — Nomura Securities — Analyst

Sanjesh Jain — ICICI Securities — Analyst

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Aaron Armstrong — Ashmore Group — Analyst

Nitin Sharma — Macquarie Research — Analyst

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Harit Kapoor — Investec Capital Services — Analyst

Jaykumar Doshi — Kotak Securities — Analyst

Abhishek Gupta — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q2 FY ’23 Earnings Conference Call of PVR Limited hosted by Axis Capital Limited. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]

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

Ankur Periwal — Senior Vice President of Axis Capital Limited

Yeah. Thank you, Suja. Good evening friends, and welcome to PVR Limited Q2 and H1 FY ’23 post result earnings call. The call will be initiated with a brief management discussion on the quarterly performance, followed by an interactive Q&A session. Management team will be represented by Mr. Ajay Bijli, Chairman and Managing Director – PVR Limited; Mr. Sanjeev Kumar, Joint Managing Director – PVR Limited; Mr. Gautam Dutta, CEO – PVR Limited; Mr. Kamal Gianchandani, Chief of Business Planning and Strategy and CEO – PVR Pictures; and Mr. Nitin Sood, CFO – PVR Limited.

Over to you Mr. Bijli for your initial comments.

Ajay Bijli — Chairman & Managing Director

Yeah. Thank you very much. We’re all — I’d like to welcome you to the earnings call to discuss the unaudited results for the quarter and half year ended September 30, 2022. I hope you’ve had the opportunity to review our presentation results, which have been uploaded on our own website as well as the stock exchange website. Please note that the numbers I’ll read out are after adjusting for the impact of IndAS 116 relating to lease accounting and are different from the reported numbers we submitted to the stock exchanges today.

The quarter ended September 30, 2022 witnessed weak performance of movies at the box office, which impacted our revenue, EBITDA, and PAT for the quarter. For the quarter ended September 30, 2022, our revenues were INR7,017 million; EBITDA was INR129 million; and PAT loss was INR566 million. For the six-month period ended September 30, 2022, total revenue was INR17,021 million; EBITDA was INR2,208 million; and PAT was INR117 million. The quarter recorded 18 million theatrical admissions across our cinemas, which were lower by 28% as compared to 25 million admissions in Q1 FY ’22 — ’23, sorry.

And then, admissions in box office collections were adversely impacted during the quarter, due to the underperformance of some major Bollywood films like Laal Singh Chaddha, Raksha Bandhan, Liger, etc. with the exception of Brahmastra Part One. Most of the other Bollywood movies performed below expectations. Brahmastra did exceedingly well at the box office and emerged as the highest-grossing Hindi film post pandemic for us, with net box office contribution up 19%.

For Hollywood, the second quarter was the weakest in almost two decades, with significantly low movie releases and box office collections. Thor: Love and Thunder was the only tentpole that released during the quarter. Contribution of regional movies, however, to the box office collections continue to be robust in the quarter with Sita Raman, Karthikeya 2, Rocketry and Thiruchitrambalam performing well at the box office. We witnessed a thrilling response to the nationwide National Cinema Day organized on Friday, 23rd September. This was an industry-wide effort by the multiplex industry to celebrate successful reopening of cinemas and welcome moviegoers back to the theaters. Over 11 multiplex chains and 4,000-plus screens across India, participated in this initiative. We welcomed 6.5 lakh guests across our cinemas on this day, which proved to be the busiest day for us in 2022 and the second highest attended day till date with occupancy of almost 80%.

Quarter three has started off on a great note with strong responses into new leases like Vikram Vedha, PS-1 and Kantara. Given the strong content pipeline, we hope that this momentum will grow and gain traction. We have several big Bollywood movies releasing over the next few months like Ram Setu, Thank God, Uunchai, Drishyam 2, Cirkus, Kisi Ka Bhai Kisi Ki Jaan, Pathan, among others. From Hollywood, we have many highly-anticipated tentpoles hitting the big screen like Black Adam, Black Panther: Wakanda Forever, Avatar: The Way of Water. From the regional genre, we have Shaakuntalam, Vaathi, Kushi and Honeymoon, etc.

The company has opened 24 screens across five cinemas in the first half of the year. And we are on track to open a total of 110 to 125 new screens by the end of the financial year. Our screen portfolio currently stands at 864 screens across 175 cinemas in 76 cities in India and Sri Lanka.

A quick update on the progress of the proposed merger of Inox Leisure Limited with the company. Both PVR and Inox had their meetings held on 11th October and 12th October respectively and have received shareholders’ approval on the proposed scheme of merger. I’m told the final date of the NCLT process will take around — almost three months more to complete.

Thank you, And I’ll open the platform for any Q&A. Thanks once again.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Abneesh Roy from Nomura [Phonetic] Investment Company. Please go ahead.

Abneesh Roy — Nomura Securities — Analyst

Yeah. Thanks. This is Nomura [Phonetic] Securities. So, I have three questions. And thanks for the opportunity. My first question is on the screen opening. So in first quarter, 10 screens and second, 14 screens, against that 110 to 125, what is the confidence because it’s a much higher ramp-up? I do understand these are bunched up and the approvals are a bit difficult to predict. So how confident will you be of 110 to 125?

Ajay Bijli — Chairman & Managing Director

We’re fairly confident and that’s why we’ve given this number. I know it sounds a bit audacious and ambitious, but that is how it has got sequenced this year. All these bunch of our projects, we have some very big ones, two with Lulu, one in — which is one in Trivandrum, one in Lucknow, which has 12 screens reached. Then, we have got with Prestige, one in Chennai. They were actually on the brink of opening in the second quarter itself. But they’ve all got pushed to the third and fourth quarter now. So, we’re fairly confident and which is the reason why we have given this number that they will open in the second half of this year.

Abneesh Roy — Nomura Securities — Analyst

Sure. My second question is on the overall footfall and ATP. So, Ajay, you had mentioned in the presentation that as a company, you are focused on driving footfall and good to see 6.5 lakhs on the Cinema Day. So one question there was the second highest footfall was on that day, which was the first one? And any learning and when you mentioned that you’re focused on driving footfall, could you elaborate that, see, apart from the marketing mailers, are there anything specific in terms of the promotion, if you could elaborate a bit on the specifics of that, how do you plan to do that?

Ajay Bijli — Chairman & Managing Director

Well, you see the main — and I’ll say something in that, I’ll request Kamal and Gautam to jump in as well. Basically, there are number of factors that come into play to increase footfall. In this particular case, of course, post the pandemic, we work into — have a Cinema Day to get a lot of people who hadn’t come in and to — and the response is phenomenal. We weren’t expecting the response to be so much, but when you dive deeper, we realize that it’s not just the pricing that has attracted people also, because a good content was sling. Brahmastra was the — there were a lot of trend-setters that had seen the two-week performance, third of reviews, but then they suddenly came as well and saw the movies. So the highest occupancies also were attributable to Brahmastra and some other movies that got released on the same day since it was on Friday also did well. So pricing is not the only thing, which has attributed to the kind of footfalls we got because then we again did some experiments with pricing, but movies subsequently like Goodbye of Mr. Bachchan just now and another couple of movies, but we realize that content did not connect. So if content is the number one thing that has to appeal to the customers and that is what drives footfall, but that doesn’t mean that we are inflexible when it comes to trying various pricing mechanism. So we will be doing that. And of course, we need to — And, of course, marketing the movies, marketing theatrical experience to the consumers once again, that is something that we’ll continue to do.

And the other thing that I want to say is that whatever is true is also untrue, because in the south, people are coming in whole. So we had — we have PS-1 that got released and Kantara that got released this year and even in this quarter and — 30th September actually, and even before that in the second quarter, there were so many movies and then, nothing was done to the pricing. Pricing remained where it is and people still came. So, it’s only certain regions and that’s okay, that’s the beauty of the Indian market and that is why we spread our circuit in such a manner that we are not completely dependent on one type of content. There is so much diversity of language content in India. And if you can — if you spread your circuit across all regions, about 35% to 40% of our circuit is in south; the rest is, of course, in west, eastern north. Then, if one kind of content doesn’t do well, it doesn’t matter because you still have other content that can bring the ensured [Phonetic] occupancies to manageable levels. So we are not that bothered about one — couple of months, Bollywood movie is not connecting with the audiences.

Abneesh Roy — Nomura Securities — Analyst

Sure. I think…

Kamal Gianchandani — Chief of Business Planning and Strategy & Chief Executive Officer of PVR Pictures

And to your question on, which was the largest footfall date was 2nd of October 2019. Movies were playing War, Joker and Dream Girl and the south Indian film called Sye Raa. So these four films had rallied together to deliver close to about 6.71 lakh admissions that day.

Abneesh Roy — Nomura Securities — Analyst

Sir, my last quick question is on the Hollywood. So there is a global peers of recession and extremely high inflation, which is playing out also in terms of the market in general. So would you attribute September ’22 being the weakest globally in terms of Hollywood content in terms of collections and number of movies? So any specific factor or this is just bad luck, bad timing?

Ajay Bijli — Chairman & Managing Director

No, I mean, Hollywood in any case represents only 10% of the box office in India, so which is the reason why the market of India is very unique because our own content is — the volumes of our own content are so high that we’re not just dependent on one sort of type of content, but yes, Hollywood is a big contributor. And this year, of course, the number of films are less, but then if you look at the quarter that we’re talking, suddenly you’ve got Avatar, you’ve got Black Adam, Black Panther and also next year, they are going to ramp it up. So this is a bit of a backlog of the movies after the pandemic. Some shootings had stopped. A lot of factors were at play, which reduced the quantity of movies, but now every studio is ramping it up.

Abneesh Roy — Nomura Securities — Analyst

Sure. That’s all from my side. Thanks a lot for that.

Ajay Bijli — Chairman & Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Sanjesh Jain from ICICI Securities. Please go ahead.

Sanjesh Jain — ICICI Securities — Analyst

Good afternoon, sir. Thanks for taking my question. I’ve got few. First on the Bollywood content and the regional. And the regional is doing good and Bollywood somehow, we have been struggling to get that mojo back, are we rethinking on the algorithm of allocation of screen move to the regional movie pushing them into the non-general flavor [Phonetic] like Kantara into the north. Are we doing anything on from our side to push that good content in the south and reach the other part of the region and hence, the balance it off? Obviously, we know that it’s becoming more pan-India, but what’s our contribution are we relooking at allocation of the screens until the Bollywood finds [Indecipherable]. That’s my first question.

Ajay Bijli — Chairman & Managing Director

Were you saying allocation of our physical screens?

Sanjesh Jain — ICICI Securities — Analyst

Yeah, screens during Friday launch, allocating more to the regional where the reviews are coming better than the Bollywood movie, which we have.

Ajay Bijli — Chairman & Managing Director

Programming.

Sanjesh Jain — ICICI Securities — Analyst

Yeah, programming.

Ajay Bijli — Chairman & Managing Director

[Technical Issues].

Operator

Sorry to interrupt you, sir, but we’re unable to hear you. Your voice is breaking.

Ajay Bijli — Chairman & Managing Director

My voice is breaking?

Operator

Yes, it was.

Ajay Bijli — Chairman & Managing Director

It’s got nothing to do with my answer. It must be the line. I think Kamal, why don’t you answer this, if it’s okay with you, the normal programming and showcasing of movies.

Kamal Gianchandani — Chief of Business Planning and Strategy & Chief Executive Officer of PVR Pictures

Sure, sure. Mr. Kumar wanted to make a point. I would request him to make this point.

Sanjeev Kumar — Joint Managing Director

Yeah. I think a lot of these movies that have come in the past two quarters this year have, first of all, the national be it RRR, KGF, and they have all been made and dubbed in various languages. Original language films like RRR, KGF have released in their local markets. But at the same time, we’ve got a very good showcasing and a number of shows and representation — equal amount of representation in the other non-traditional markets as well such as north and west and central India in the dubbed version. So we are very cognizant of the fact that when these films come, they get equal representation in — across the country and it has since they also come in dubbed version. And therefore, we able to tap into non-traditional markets across the country. So, some of them come on the first day only on all languages and one of them recent examples Kantara, which came in Kannada was the original version, but then the response was so good that the producer decided to also release in Hindi after two weeks. So there’s a lot of support that’s coming from the regional industry to cater to as wider audience and as pan-Indian audience by dubbing it in various languages. And we’re accommodating these films all over country in equal measure.

Sanjesh Jain — ICICI Securities — Analyst

Okay. So what we are telling that, that is not a challenge. So if the content is good, getting the screen is really not a challenge for us?

Sanjeev Kumar — Joint Managing Director

Yeah, collaborators point is even KGF, if you see, did INR400 crores of business in the north and the west region. That was primarily because the way the film was programmed. It became bigger than Dangal only because of the kind of showcasing the film got.

Ajay Bijli — Chairman & Managing Director

So, Mr. Kumar, Gautam has covered all the important aspects and to your question, whether it’s a challenge? Yes, it’s a challenge. It is always a balancing act. It was a balancing act even pre-COVID and it continues to be a balancing act post-COVID to accommodate dubbed version, Hindi and original version. We also play incidentally Tamil, Telugu, Kannad, Malayalam films in original versions in non-traditional markets like Bombay — Mumbai rather, Delhi and many other parts of north India and west India. But let me conclude by making this point that it’s a good challenge to have. This phenomena where as Mr. Kumar mentioned that the demand and the reviews were so strong for Kantara that exhibitors requested the producer to make the dubbed version available in Hindi, and the film was dubbed in quick time and then, made available within two weeks. And now, it’s doing fantastic business, which means out of thin air, the exhibitors have created incremental admissions, which wouldn’t have happened if exhibitors had not applied pressure on the producer and producer had not relented by dubbing the film in Hindi. So it’s a good challenge to have. We are constantly — our — the whole attention is on the ball. We are looking at all opportunities that exist, and we do everything possible to exploit these opportunities.

Sanjesh Jain — ICICI Securities — Analyst

That’s great to hear that we are taking initiatives to push for the dubbing. I think that requires because you have lot of franchise into the movie and content and that was exactly what I was looking for. Are we pushing the producer to produce more pan-India, so it expands our good content reach at least and it benefits us in terms of a better business?

And my second question is more on the cost line item and EBITDA breakeven. I could see that there is a rental cost declined sequentially by 6%. So what is driving this decline? Is there some part of the screen where there is a revenue-sharing and hence, there is a decline in the rental, is that a right understanding? If yes, how many screens or a percentage?

Nitin Sood — Chief Financial Officer

Yeah. That’s correct. We have a lot of screens where we have a revenue-share percentage in quarters where performance is below the level revenue-share doesn’t kick in, or there is a very small revenue share. And hence, the decline — sequential decline that you see is largely on account of that.

Sanjesh Jain — ICICI Securities — Analyst

Great. So sir, is there any intent structurally or by design, we want to reduce this operating leverage and make it more predictable model by making rental more variable or linked to the revenue? Is there a constant or a choice effort towards doing that?

Kamal Gianchandani — Chief of Business Planning and Strategy & Chief Executive Officer of PVR Pictures

Yeah. I mean, these are slightly older contract, whereas of course, I think we are — our endeavor is to make this also as variable as possible. And our endeavor will be able to do that with upcoming projects and with the new developers as well. It’s again a challenge, but a challenge that is something that we want to explore. And we are — we have been successful in some cases and not so successful in some other cases, but that’s the way forward I guess to make it as available based on revenue share with the developers.

Sanjesh Jain — ICICI Securities — Analyst

Any insight what percentage of today’s screen there will be on a variable and what would be a realistic target, say, three or four years down the line for us?

Nitin Sood — Chief Financial Officer

Yeah. In fact, most of the new screens that we are signing would have a minimum guarantee and a revenue share class, bulk of those screens will have that is what I would say. 70% to 80% of the new screen signings would have typically a revenue share class already within.

Sanjesh Jain — ICICI Securities — Analyst

Great, great. Thanks. Just one last bookkeeping question, the tax rate on the gross box office collection in this quarter look quite high from 17% to 23%. Last quarter, it was 17%. This quarter, it’s moved to 23%. Can you help us understand what is driving such a sharp sequential jump in the tax rate?

Nitin Sood — Chief Financial Officer

I don’t know what numbers are you looking at, but we can have this chat offline. It will not be so high.

Sanjesh Jain — ICICI Securities — Analyst

Yes, sir. So sir, what is the average tax rate today on the gross profit — gross box office collection?

Nitin Sood — Chief Financial Officer

Same number, 17% to 18% as for the GST basis.

Sanjesh Jain — ICICI Securities — Analyst

[Foreign Speech]. 17% to 18%, okay. I’ll take this question offline. And thanks for answering all my question and best of luck, sir.

Operator

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

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Yeah. Thanks for the opportunity. My question is surrounding footfall. Now in this quarter, I understand that we got 39% lower than the pre-COVID pay [Phonetic] and understandably so because of the average content, but if I look at some of the measures that we have been taking like, for example, showcasing the old movies of Amitabh Bachchan or for that matter having plans to kind of like seeing the old plays, concert or for that matter coming up with an idea of the National Cinema Day, so basically are these measures an indication that the industry is struggling to attract footfall due to the evolution of the audience taste post pandemic? I’m basically asking this question because before the pandemic, the quarter for us [Indecipherable] struggled because of poor content, so your thoughts on that?

Ajay Bijli — Chairman & Managing Director

I think we’ve answered this before. Kamal, you want to answer that? I mean, because I’ve — we have to clearly clarify that all the numbers which are there in the south are not showing any struggle at all. People are coming out and watching movies. This is not something alien to the Indian consumer when — and it’s just couple of those some big Bollywood movies, which have not done well, due to which there is a decrease in footfall. Otherwise — and National Cinema Day was not done out of desperation. It was to celebrate the fact that we were shut for so many days, so many years, 18 months rather. And so, it was something that was done as a worldwide initiative and India also did it. And so, this is no indication of any lack of appetite of either the movie makers to continue to make the number of quality and the quantity of movies that they make, nor any diminishing appetite of the consumer to go out and consume the number one form of out-of-home entertainment for them.

Gautam Dutta — Chief Executive Officer

And also, if you look at our quarter one numbers, that was a testimony itself; in the sense, we got 2.5 crore people coming in, what more would you want. And this was just after the pandemic. So we did get the number of people. It’s purely — this quarter, it is largely because of certain content not hitting the bull’s eye and because of which, and coming to your fact as marketers as people who would — always would want to ensure that people keep coming to cinemas, our job is cut out. Whenever a content doesn’t do well, we will need to see different ways to get people in. We’ve got the infrastructure. We’ve got the people. We’ve got great F&B. So that is the reason why we will keep trying for a newer thing. Like Mr. Bijli said, NCD came in and that was a big help overall to see again, whether consumers had rejected or accepted the whole concept of cinema and — but given the fact that we had 10% footfalls on one single day when you look at the months, complete footfall was the indication that consumers love to get good cinema. And it’s just about the content and whenever there will be a low content, we will like to package product differently. We will like to get into alternate content like we will be playing T20 and [Indecipherable] as well going forward. These are great opportunities from stand-in comedies to little conferences within our auditorium. We try everything to see how we can get more and more people in the cinema.

Kamal Gianchandani — Chief of Business Planning and Strategy & Chief Executive Officer of PVR Pictures

Yeah. Just to summarize what Mr. Bijli and Gautam have shared, so firstly, we would request — we would urge all our stakeholders, including analysts and the other observers that we have vis-a-vis film business to form an opinion on the box office after the end of Q3 and not base their opinion just on Q2. As Gautam and Mr. Bijli rightly mentioned, a) there a lot of areas which are a lot of geographies which continued to do exceedingly well, also with respect to Hindi, it’s not fair to say that Hindi has totally underperformed because there had been films like Kashmir Files, Brahmastra, Gangubai Kathiawadi, Sooryavanshi, Bhool Bhulaiyaa 2, Jug Jug Jiyo, Doctor G, which released this Friday, and while 83, Vikram Vedha, a lot of analysts, observers who would say, have underwhelmed in terms of box office collection, we would tend to disagree, because both are bordering at INR100 crores net box office collection, which is not a small number by any stretch or imagination. So from our prism, a lot of Hindi films have performed. And south has performed exceptionally well. We would also request that people form an opinion at the end of Q3 and not base it what we have on Q2.

On the diversification in terms of content supply, well, that’s part of our strategy. We like these big blockbusters, which have something for everyone,. which hit all the four quadrants, but at the same time, we also like discerning content, we also like niche content. So Chhello Show Chhello Divas, which is a Gujarati film, which is India’s entry to Oscar. We are deeply passionate about such service, but at the same time, we are also big supporters of Brahmastra, Vikram Vedha, the obvious big blockbusters, which are hitting all the four quadrants. We are also supportive and big believers in such films. And at the same time, whether it’s cricket, football, exhibition, musical concerts and anime films, we want to offer as much content as possible, so we can reach out to as many different segments of moviegoers as possible and that’s part of our strategy. But our mainstay will always be feature films. That will not change. That is the DNA of our business. That’s the reason we exist.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Sounds good. Thanks for an elaborative answer. So in this content, I mean, is it fair to assume that we’ll end up by [Indecipherable] footfall a run rate of approximately 10 crores, because if I look at 1H, I think we are somewhere around [Indecipherable] apparently? And you also highlighted that 1Q was exceptional quarter, but the reason I asked this question is even in 1Q, our footfall at 2.5 crores [Phonetic] was roughly 7% to 8% lower than the comparable pre-COVID phase. So in that context…

Ajay Bijli — Chairman & Managing Director

Can I interrupt you, sir? We can’t hear you at all. You’ll have to…

Ankur Periwal — Senior Vice President of Axis Capital Limited

There is a disturbance at your end. We’re not able to hear you clearly.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Is this better now?

Ankur Periwal — Senior Vice President of Axis Capital Limited

Yes.

Ajay Bijli — Chairman & Managing Director

It’s better. Go on.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Yeah. So what I wanted to ask is that in this context, is it fair to assume that we’ll end FY ’23 at 10 crore kind of footfall number, which we reported during the pre-pandemic time, because if I look at 1H, we are at a 4 crore currently? And then, I asked the previous question is because in 1Q FY ’23 despite having footfalls of 4.5 crores, we were approximately 7% to 8% lower than the pre-pandemic base. So given whatever finishing you have highlighted, is 10 crore a reasonable number to go ahead with or is it slightly a bit aggressive?

Ajay Bijli — Chairman & Managing Director

So we would not like to make any forward-looking statements at this point, but looking at the lineup, looking at the way we’ve started quarter three, we feel extremely confident that box office will perhaps surprise a lot of people on the upside. That’s all we would say at this point.

Jinesh Joshi — Prabhudas Lilladher Private Limited — Analyst

Sure, sir. Thank you so much.

Operator

Thank you. The next question is from the line of Aaron Armstrong from Ashmore Group. Please go ahead.

Aaron Armstrong — Ashmore Group — Analyst

Hi, good afternoon. Thank you very much for taking the questions. Just a couple from my side. Firstly, on the average ticket price and spend per head, could you talk a bit more about the decline that we saw, for example, ticket price went down from INR250 in Q1 down to INR224 in Q2? And how much of that is due to underperforming blockbusters or kind of moving mix? Do you charge a high ticket price per a certain type of movie versus another? How much would be attributable to the National Cinema Day, or any kind of promotions around that? And then, looking forward, how do you see those numbers in the next couple of quarters? So, the numbers that we saw in Q1 are the INR250 for ATP and the INR134 for spend per head. Was Q1 just an extremely good quarter, or do you think we can get back to those kind of numbers in the next couple of quarters?

Ajay Bijli — Chairman & Managing Director

So ATP did take a bit of a hitting simply because of some of the big blockbusters did not fire, and we needed to revert to the popular price band as the step-down from the blockbuster pricing. Having said that, we believe in quarter three given the slate of the big films, we should be — it’s somewhere closer to the quarter one ATP. And so, that’s really the reason. National Cinema Day also eroded some of the ATP because the admissions were very large that day. We got close to about 10% of the overall month footfall on that single day. So technically, that did erode some of our ATP. It would have been much higher, if we didn’t have the National Cinema Day, but having said that, quarter three we should be back closer to the quarter one numbers.

Aaron Armstrong — Ashmore Group — Analyst

Thank you. And on the spend per head?

Ajay Bijli — Chairman & Managing Director

That will be maintained. There shouldn’t be any change at all on spend per head. We will be largely in the INR135, INR140 mark.

Aaron Armstrong — Ashmore Group — Analyst

That’s great. Thank you. And then, on the exclusivity window versus the OTT releases, are we back to pre-pandemic levels now?

Ajay Bijli — Chairman & Managing Director

Yes. We’re back to eight weeks, eight weeks [Indecipherable].

Aaron Armstrong — Ashmore Group — Analyst

Great. Thank you. And then, could you give an update on advertising revenue plays in kind of normalization?

Nitin Sood — Chief Financial Officer

So advertising is taking a bit longer than what we had expected. We were very bullish about the quarter two recoveries. However, given the fact that some of the bigger films did not fire, we’ve taken a bit of a dent. We are back to about 62% of recovery over to 2019 number. This recovery percentage largely looks similar in that sort of a range for quarter three as well, given the fact that quarter three in 2019 was one of the biggest quarters. For advertising, we had INR122 crores revenue in 2019. So we believe that our number will again be around 62%, 63% recovery mark. However, end of the year, I think we will be upwards of 70%, 72% given the fact that quarter four, we’ll kind of march ahead of the 2019 advertising numbers.

Aaron Armstrong — Ashmore Group — Analyst

Understood. Thanks. So that’s a — is that on a revenue basis in absolute terms? So in Q4 this year, the revenue from advertising will be higher than it was in 2019, or if we look at, say, a percentage of total revenue or some kind of way that reflects the fact that the network is now obviously much larger than it was two or three years ago?

Nitin Sood — Chief Financial Officer

In quarter four, the advertising number will be a lot bigger than what we had recorded in 2019. This was how it’s been anticipated and this is how it’s looking given the release schedule of the film.

Ajay Bijli — Chairman & Managing Director

The absolute number?

Nitin Sood — Chief Financial Officer

We can’t possibly give you an absolute number, but we’ll as I said close to about 72% recovery at the end of the year, at the end of quarter four on the 2019 number.

Aaron Armstrong — Ashmore Group — Analyst

That’s great. Thank you very much.

Operator

Thank you. The next question is from the line of Nitin Sharma from Macquarie [Phonetic] Research. Please go ahead.

Nitin Sharma — Macquarie Research — Analyst

Thank you for taking my question. Two questions, I would like to understand what kind of occupancy you’re seeing in the premium segment? And out of those 110 to 125 screens, how many will be premium [Indecipherable]? And then, I have follow-up.

Ajay Bijli — Chairman & Managing Director

Our definition of a premium screen will be all of our IMAX, 4DX, Playhouse, LUXE and Director’s Cut. We normally operate at a higher occupancy than the normal auditoriums. So it has a premium of about 5% to 7% premium over the normal auditorium. And yeah, so this is — and of course, the pricing premiumness is also there.

Nitin Sharma — Macquarie Research — Analyst

Okay. Out of those 110 to 125 screens, this year, you’ll be adding, how much will be the premium screens?

Ajay Bijli — Chairman & Managing Director

Premium, 11% of the total screens is premium screens.

Nitin Sood — Chief Financial Officer

Okay. Second question is, can you please talk about how much occupancy you are seeing in different regions, some sense that how much working in the western region and the central [Phonetic] region? Thank you.

Ajay Bijli — Chairman & Managing Director

So in terms of occupancy percentage, as it would reflect from the kind of films which are difficult at the box office, south Indian box office occupancy are higher as compared to west and north. I would request my colleague, Gautam, to give you the exact percentages. Gautam, would you like to share the percentage?

Gautam Dutta — Chief Executive Officer

I wouldn’t have it [Technical Issues].

Nitin Sood — Chief Financial Officer

I think if you look at broadly the occupancy for this quarter, which was averaged at about 24%, south would be about 30%, 35%, close to 35%, whereas north and western region, which is the Hindi dominated, it would be about 22% to 22.5%, which is broadly the difference that you would see.

Nitin Sharma — Macquarie Research — Analyst

So south — occupancy in south has really come down compared to the previous quarter or at the same level?

Nitin Sood — Chief Financial Officer

Yes. Even south has come down by about 30%-odd. It has also declined, while other regions have declined more sharply, 15%, 14%.

Ajay Bijli — Chairman & Managing Director

Sequentially, my colleague, Gautam spoke about the south occupancy. Nitin spoke about south occupancy being 35%. Sequentially, as compared to Q1, it has come down by about 12%, 13% versus the drop, which has taken place in north and west, which is also at a similar level, but they also were operating at a smaller base in terms of occupancy percentage. So the drop has been fairly even if you look at sequential degrowth in occupancies.

Nitin Sharma — Macquarie Research — Analyst

Understood. Thanks a lot.

Operator

Thank you. The next question is from the line of Aliasgar Shakir from Motilal Oswal. Please go ahead.

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Yeah. Thanks for the opportunity. And I’m just — I just want your comments on the pricing. So you did mention that pricing you saw this quarter some impact because of some of the movies not doing well, but you also indicated that National Cinema Day, lower pricing has given us a very strong occupancy or volumes. So any thoughts around there to — I mean probably if you can share if we have internally done any work in terms of understanding the price elasticity and if that can be used an effective tool to probably improve our occupancy?

The follow-up question here is also recently Laal Singh Chaddha and a few other movies like Dhaakad and the others, who — which did not do very well in box office, had a reasonably good viewership. In fact, I think they were on top 2 positions on Netflix. So I mean, your comments on that also will be very useful.

Ajay Bijli — Chairman & Managing Director

So I would request my colleague, Gautam, to speak about the learnings from National Cinema Day pricing. And then, we can address your second question, which we understood you’re saying Laal Singh Chaddha has done extremely well on Netflix. That was your second question, right?

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Yeah, correct. The Laal Singh Chaddha as well as I think Dhaakad and a few others, which didn’t do well on box office, have seemingly done pretty well on Netflix. So I mean, just your thoughts on that. I mean, from the point of view that it was all pressing [Phonetic]?

Ajay Bijli — Chairman & Managing Director

First, your question on the National Cinema Day, see, National Cinema Day the way we looked at it, it was an event, an event where people celebrated cinema and it became such a rage to — for people to come out and get to the cinema. Even cinemas, which had a normal ATP between INR100 to INR150, which meant that they were operating at prices of between INR80 to INR200, also came out in boards to actually come and enjoy a film that day. So one of our biggest learning was that cinema became relevant, cinema became a talking point, and this was one of the biggest marketing exercise we could have done together as an industry to get people back to the cinemas to flavor this unique offering. So the way we looked at it was that it was not — never about incremental sales, and that’s the reason why the price that was picked, which was INR75, was a sharp cut over what multiplexes normally operate with. Even our F&B prices that day, we’ve taken a sharp cut only because we wanted more and more consumers to come and flavor this product.

So from that perspective, as a marketing exercise, I think it was an unparalleled initiative, which was taken by the industry. And it got the whole topic of cinemas back. We got a lot of positive press around it. Brahmastra, which was running in week three, got huge amount of footfalls coming in. The new releases, movies like Dhokha and Chup also benefited a lot, clearly indicating that if price could be played tactically, this could be a great way to get more and more people to come and flavor this product. And what we also observed was that given the fact that there was parity of pricing across all the cinemas, the premium set of the cinemas did even better simply because people wanted to upgrade, and it was upgrade at no cost. So people really came in, in numbers irrespective of the content that was playing, but wanted to enjoy that experience. So I think as time would possibly sort of open up for us, we will only get better with this whole exercise and initiative, and we believe it was a great initiative in the right direction.

Gautam Dutta — Chief Executive Officer

To summarize the key points, while we’ve had a lot of learnings, and you would continue to see a lot of new initiatives from PVR chain, which would involve pricing-related decisions, but they would all be taken in a very responsible fashion, and we would be trading this path in a very cautious fashion. Our endeavor would always be to get incremental footfalls, but without really compromising with respect to the value that we’ve managed to achieve on the pricing front.

On your second question, Dhaakad, Laal Singh Chaddha and some of the other films clocking very strong, streaming numbers on Netflix or other streaming platforms, frankly, very tough to comment on it because the streaming data is not freely available, unlike theatrical platform where box office data is quite transparently available with many stakeholders between exhibitor, distributors, analysts, trade pandits, media, a lot of people have access to box office data. But very few people, in fact, I would think even the producers who have licensed their films to streaming platforms, even they don’t have access to streaming data of their own films. That’s the nature of relationship between streaming and the content creator fraternity. So I’m not too sure what is the source of your information. But the last I looked at Netflix, I recall seeing Laal Singh Chaddha at the fifth spot in the top 10 list. And I would imagine if Laal Singh Chaddha was one of the leading films, which was being streamed on Netflix or Dhaakad, which was being streamed on ZEE5. Ideally, they should have been the Number 1 in the top 10 list, but I didn’t see that. So I [Speech Overlap].

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

So by the way, Laal Singh Chaddha is top in Hindi, which is what most websites media websites have been hinting. I’m also not sure on this whole, but that’s what all media websites have been hinting. But the more question I had basically is that given the fact that we also saw good turnout when pricing was lower on National Cinema Day, and a lot of these guys also actually are playing on the pricing when they see volume. So I understand your point that you don’t want to be disruptive, but probably, that’s why I was — I’m trying to figure out whether is price elasticity positive, that could kind of help us get better occupancy, better revenue if they’ve begun play around the pricing. But I get your thoughts on that.

Gautam Dutta — Chief Executive Officer

So just to clarify, when I say top 10, I’m referring to the top 10 list of Netflix platform. If you go on Netflix, one of the category that they offer in order to improve their discovery on the platform is the top 10 list on their platform. Laal Singh Chaddha is not the top film as far as I recall, but I would just leave it at that.

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Sure. Sure, this is…

Ajay Bijli — Chairman & Managing Director

I would add to that, some of the firms that have done well, be it Gangubai and Kahsmir Files and Bhool Bhulaiyaa, and Jug Jug Jiyo, they’ve all played on normal pricing. So I — that wasn’t really a reason why people didn’t come in or that wasn’t the reason we didn’t perform. So all of these hits that we have in the last two quarters have worded [Phonetic] regular pricing only.

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Fair point. That is useful. And just last one question on the costs. So I understand we have a very fixed cost structure. But do you think — I mean, we have any — I mean, apart from the rental part that you did mention some time back, other costs have any variability that can be created in a way to cushion any kind of such impact that we see in specific quarters?

Ajay Bijli — Chairman & Managing Director

I think personnel is one of them. It has come down.

Nitin Sood — Chief Financial Officer

That is already reflected if you look at the existing numbers.

Ajay Bijli — Chairman & Managing Director

Utilities and personnel are both — have both come down because they are a lot more in our control as well and we’re experimenting a lot with people and formats like most — a lot of our sales have moved online now, which means requiring perhaps a lot less people. So this technology is something that we’re really sort of looking at driving more aggressively. So we’re able to reduce personnel cost and also regulate utility, better utilization of utilities through technology.

Nitin Sood — Chief Financial Officer

And you must also remember when you look at some of these costs when you compare it, we’re comparing it to pre-pandemic. It is three years ago. So there is certain amount of inflation that is built in. So when you see the cost remaining static or at the same level, it is after three years of inflation and wage growth, which is factored in, which means there has been a decent amount of reduction over where we were operating at a pre-pandemic level.

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Correct. Do you think exhibition cost, movie exhibition cost has a possibility of creating some variability?

Ajay Bijli — Chairman & Managing Director

The film exhibition cost is 100% variable.

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Yeah, but I mean my point was basically that given the fact that occupancy in these quarters have been low, we could kind of re-sit or revisit those kind of numbers that we are so far having.

Gautam Dutta — Chief Executive Officer

We would not comment on this aspect. All we would say is that our market has tremendous headroom to grow, and this is the time to collaborate with our content creators and help them expand in the market, create bigger and better films. And that’s where we are focused on.

Aliasgar Shakir — Motilal Oswal Financial Services Ltd. — Analyst

Absolutely. Got it. This is very helpful. Thank you so much for patiently answering all the questions.

Operator

Thank you. The next question is from the line of Tejas Shah [Phonetic] from Investec Capital Services. Please go ahead.

Harit Kapoor — Investec Capital Services — Analyst

Yeah. Hi, good evening. This is Harit from Investec. I just had two questions. First one was on net box office. So in the quarter one call, you had mentioned that for the first six months of this calendar year, net box office is about INR5,700-odd crores. Would you have a similar number for what Q2 looked like in your estimate?

Nitin Sood — Chief Financial Officer

Sorry, can you repeat the question once again?

Harit Kapoor — Investec Capital Services — Analyst

Yeah. You have mentioned in the quarter one call that net box office overall in India was about INR5,700 crores for the first six months of the calendar year. Would you have a similar number in your estimate for Q2? How much is overall net box office in quarter two, so July to September?

Gautam Dutta — Chief Executive Officer

That number, we don’t have like a formal number, which has been validated by any official source. But it’s safe to assume that INR5,700 crores, INR5,600 crores, which translates to about INR1,000 crores on an average per month, would have reduced by about 15% in this — 15% each month in these last three months, which is Q2 of the current financial year.

Harit Kapoor — Investec Capital Services — Analyst

Okay. The reason to ask this question was my back of the envelope calculation suggested that versus pre-COVID, there would have been a material market share gain at your INR330 crores net box office that you delivered this quarter. So it’s just — it was in — just to validate that point. So that was my question.

Gautam Dutta — Chief Executive Officer

We at PVR chain and I would — we would also imagine that many other organized teams would continue to gain market share from the independent cinemas, be it independent multiplexes or single screen cinemas. That’s a trend which is in play and would continue for quite some time.

Harit Kapoor — Investec Capital Services — Analyst

Got it. And my second question was on the breakeven. This quarter, you’ve kind of broken even at EBITDA level on 24% occupancy. Obviously, ad is not yet back as well. So assuming ad comes back to normalized level, is breakeven occupancy then a 21%, 22% number for you? Would that be the right way to look at?

Nitin Sood — Chief Financial Officer

Correct. That’s correct. If advertising revenue was to come back full stream, our breakeven occupancy would be about 20%, 21%.

Harit Kapoor — Investec Capital Services — Analyst

20%, 21%. Got it. Those are my two questions. Thank you.

Operator

Thank you. The next question is from the line of Jaykumar Doshi from Kotak. Please go ahead.

Jaykumar Doshi — Kotak Securities — Analyst

Hi, good evening team. This question is on a new article that was sort of Business Standard yesterday, the CCI has conducted a study [Indecipherable] giving out some health regulation, revenue share and the continuation of what you will see. So what I want to understand is how — what’s the background of this? And why is CCI got called into something which it has to do with commercial terms of the industry?

Ajay Bijli — Chairman & Managing Director

Yeah. So first of all, CCI at various points of time does its own independent studies for various sectors. I think our understanding is that this is a study which was initiated by CCI several months ago to understand the film distribution market and dynamics at play. This study has been made public only a couple of days ago. Even we have not finished reading the study. So it will be difficult for us to comment. But CCI as a practice initiates and does this study for various sectors, including e-commerce, logistics, all the other sectors at various points of time. I think similarly, they have done a study on the film distribution space in India as well.

Jaykumar Doshi — Kotak Securities — Analyst

But do they have — can they force some changes, or is it more of just a study where they gave some suggestions and recommendations?

Ajay Bijli — Chairman & Managing Director

See, we haven’t read the study. So we would not like to comment on it. We’ve also been made available of the copy of the study only a couple of days ago, which was published by CCI. So we haven’t read the study, so I would not like to comment on it.

Jaykumar Doshi — Kotak Securities — Analyst

This is the first time they have done some study on cinema industry. Is that correct?

Ajay Bijli — Chairman & Managing Director

Sorry, I didn’t get your question, Jay.

Jaykumar Doshi — Kotak Securities — Analyst

Is this the first time they have done a study on cinema industry, or they have done [Technical Issues].

Operator

I’m sorry to interrupt you Jaykumar, but your voice is breaking. So we cannot hear you clearly.

Jaykumar Doshi — Kotak Securities — Analyst

Hi, am I audible?

Operator

Yes, please go ahead.

Jaykumar Doshi — Kotak Securities — Analyst

Yeah. Is this the first time they have conducted such a study on film industry, or have they done something similar in the past as well?

Ajay Bijli — Chairman & Managing Director

No. This is the first time they have done a study on the film distribution piece in India.

Jaykumar Doshi — Kotak Securities — Analyst

Understood. Thank you. And my second question is you’ve launched some the PVR Passport loyalty program for select cities today. So how does this differ from the loyalty program that you had earlier? If you could just give a quick overview of some.

Gautam Dutta — Chief Executive Officer

So Passport program is like a subscription program, where it was sort of envisaged as a certain fees being deducted every month from the consumer, whoever would enroll into the program, and he would be given a certain amount of visitation free of cost against the subscription plan. RBI midway changed a few of the payment system and processes and guidelines. Because of which, there’s been a little change and a delay, and now the rule dictates that we could only charge the consumer upfront and not be asking for subscription fees every month.

So we’ve made a few changes, and we’ve launched that service on the 28th of September in three markets just to see how it kind of sort of works with the consumer. And this has been done in Kolkata, Lucknow and Pune. These are the three markets where we are doing a beta trial of the Passport program, and these are very initial days, just about a week that we’ve kind of launched it. So we will put this on a study for the next three or four months, make a few changes to it. And if it sort of works well, then we will take it nationally.

Jaykumar Doshi — Kotak Securities — Analyst

Understood. Thank you so much. That’s it from side.

Operator

Thank you. The next question is from the line of Abhishek Gupta, an individual investor. Please go ahead.

Abhishek Gupta — Individual Investor — Analyst

Yeah. Thanks for the opportunity. I have two questions. So first one related to the bookings. So how much of the…

Operator

Sorry to interrupt you. Mr. Gupta, may we request you to speak a little louder?

Abhishek Gupta — Individual Investor — Analyst

Yeah, sorry. I’m saying that how much of bookings that we are doing through your own PVR app compared to the other and distribution among the — on-spot bookings, through BookMyShow or the other third parties compared to the PVR? And with regarding the price hike, like the Telangana and Andhra, there is a price hike a couple of quarters back. But we do see a downfall over there due to the price hike or anything related to that? And also, I’ll speak on to the questions together, it will be easy for you guys.

So on the third one regarding the F&B optimization, as a consumer and [Indecipherable], so when you go there, it’s very unoptimized way of getting an F&B served on a Friday night. I’m worried about what would happen on the National Cinema Day when 6.4 million people — 6.4 lakh people visit your campuses. But on a regular Friday or a Saturday or a Sunday, there is a very less optimized F&B. People, myself, went back to the theater after interval without taking the food because it was not optimized, not servable. They were very slow in all those things. How are we adapting? Thank you.

Gautam Dutta — Chief Executive Officer

Maybe your first question, which is PVR app and website contribution, this is sensitive information to our business. And if you don’t mind, we would like to pass this question. Your second question was — can you repeat the second?

Ajay Bijli — Chairman & Managing Director

F&B, it was about…

Abhishek Gupta — Individual Investor — Analyst

Second one was regarding the price hike that happened in Telangana and the Andhra market a couple of quarters back. So has that impacted the footfalls on the appetite?

Ajay Bijli — Chairman & Managing Director

So there was a price hike. And clearly, the pricing decision has been taken. It will take a little time for it to settle. The price hike in that market is a little severe, but we believe that given the overall cinema experience and the way we are kind of upping the game on F&B, we’ll be able to settle the market with that.

Abhishek Gupta — Individual Investor — Analyst

Okay. Thank you.

Operator

Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments.

Ajay Bijli — Chairman & Managing Director

Yeah. Thank you, everyone. Thank you for joining the call and appreciate your questions and your support. And thank you, and we will convene again in the next quarter.

Operator

[Operator Closing Remarks]