Quarter 2 was yet another quarter that reminded us about the importance of the quality of content and how significant its impact can be on the business. But at the same time, we are looking at this quarter as one, which made us sharper and fitter, having faced new year challenges since the pandemic began. What is heartening is our performance on the F&B front which strengthens our belief that strategic efforts, innovativeness, and consistency can fetch great results.
– Mr. Alok Tandon, CEO
| Stock Data | |
| Ticker | INOXLEISUR |
| Exchange | NSE & BSE |
| Industry | ENTERTAINMENT |
| Price Performance | |
| Last 5 Days | +1.09% |
| YTD | +46.22% |
| Last 12 Months | +27.70% |
Company Description:
INOX Leisure Ltd. is one of the largest multiplex operators in India. The company possesses 708 screens spread across 74 cities with 1,58,000+ seats. The company utilises its state of the art theatres to provide a high quality cinematic experience to its customers. The major revenue segments of the firm are movie ticket sales, food & beverage sales and advertising. The company is set to merge with PVR Limited to create PVR Inox Ltd. that will become the largest multiplex brand in India.
Improvement in the Unit Cost Economics:
We reported our best-ever quarterly spends-per-head at Rs.102 which was largely driven by our rigour on a lot of fronts, critical additions to the menu, introduction of seasonal specialties, timely and result-oriented marketing initiatives, interactive culinary sessions across the country. You have seen the way we reduced our operational fixed costs, whether it’s in manpower or whether it’s in Power & Fuel and R&M or other overheads. So I think the hard work we did when all the screens were shut was that we formed groups in our company to look at every P&L item with a fine-tooth comb. I think that’s yielding results today.
– Mr. Alok Tandon, CEO
The company has paid special attention to make its operations more efficient. The company has observed its lowest spends per head. Along with that, every expense segment has observed a fall for the sake of efficiency. The employee benefit expense has fallen from ₹ 12.7 lakhs per screen to ₹ 9.3 lakhs. In the case of Power, Fuel and R&M, expenses have gone down by 3% which is particularly impressive in this inflationary environment.
The overheads have also seen a significant fall to ₹ 4.5 lakh per screen. This trend showcases the company’s commitment to keep their expenses in check while looking for scope for improvement in every facet of its business.
Expansion – Through Inorganic Growth:
The company has always sought out growth either the organic route or the inorganic route. The company is set to merge with PVR Limited to create PVR Inox Ltd. that will become the largest multiplex brand in India. Additionally, the company has decided to acquire ‘Luxe Cinemas’ by Q4FY23. Luxe Cinemas is Chennai’s Largest cinema multiplex with 11 screens and 2500+ seats. On the organic front, the company has observed the highest screen addition in the industry with 30 additional screens.
Despite the aggressive growth strategy, the company possesses a strong liquidity position and currently is a net debt free company.
Content Improvement:
As a multiplex operator, the content is the most crucial aspect of the business. In the second quarter, a lot of big budget movies did not turn out to be blockbusters. This was reflected in the reported results for Q2FY23. However, the content line up for the coming quarters are promising which might lead to an overall improvement in the company’s profitability.
Financial Performance:
| ₹ Cr. | Q2FY23 | Q1FY23 | Q2FY20 |
| Total Revenue | 381 | 589 | 524 |
| Total Expenses | 289 | 372 | 352 |
| EBITDA | 92 | 218 | 172 |
| EBITDA Margin % | 24% | 37% | 33% |
| PBT | (53) | 76 | 53 |
| PAT | (40) | 57 | 35 |
| PAT Margin | -10% | 10% | 7% |
| Basic EPS | (3.30) | 4.67 | 3.58 |