PVR Inox Ltd Management Discussions

Management discussion and analysis report

Global Economic Review

The global economy in calendar year 2024 demonstrated resilience, achieving a much-discussed "soft landing" with slow yet steady growth.

In CY 2024, global GDP growth has slightly decreased to 3.3% from 3.5% in CY 2023. Inflation has dropped significantly from 6.0% in 2023 to 4.9% in 2024 indicating easing price pressures. However, the unemployment rate remains relatively high at 5.3%, only marginally improving from 5.4% in 2023. Looking ahead to CY 2025, GDP growth is forecasted to reduce to 2.8%, while inflation is projected to decline further to 3.5%, signalling a continued disinflationary trend. Meanwhile, unemployment is expected to decrease modestly to 5.2%, reflecting gradual labour market stability.

While inflation has been declining, growth remains subdued compared to pre-pandemic levels. Central banks navigated a delicate balance, raising interest rates to curb inflation without triggering recessions—a risk that, for the most part, was successfully avoided.

One of the defining features of 2024 was the sheer scale of elections worldwide, with billions heading to the polls. Interestingly, economic indicators such as GDP growth, unemployment rates, and inflation played a lesser role in shaping outcomes than broader concerns about the future.

Despite signs of resilience, uncertainty continues to cloud the global outlook, with geopolitical tensions remaining a major source of disruption. A significant contributor to this uncertainty is the re-escalation of U.S. trade tariffs, which are disrupting global supply chains and altering investment flows. Alongside this, evolving trade policies and shifting global economic alliances are becoming equally influential in shaping growth trajectories in the near term. Meanwhile, Chinas traditional role as a primary engine of global expansion is evolving, even as Asias broader economic influence continues to strengthen on the world stage.

The Indian Economy: A Unique Global Standout

In FY25, Indias economy exhibited a combination of robust growth and emerging challenges. The countrys GDP expanded at a pace of 6.5%, driven by sustained domestic demand, increased infrastructure investments, and resilience in the export sector.

The governments continued focus on capital expenditure, particularly in roads, railways, and energy, bolstered economic activity. The services sector also played a key role, with significant growth in retail, travel, and hospitality, supported by rising consumer confidence and urban demand. Forex reserves reached a record high of $704.9 billion, strengthening Indias external position and providing a buffer against global economic volatility.

Despite these positive indicators, inflationary pressures persisted, particularly in food and fuel prices, which impacted household budgets and constrained discretionary spending. While urban consumption remained strong, rural demand showed signs of strain due to erratic monsoon patterns affecting agricultural output. Private consumption, which forms a significant part of the economy, witnessed some slowdown in growth compared to previous years. The Reserve Bank of India (RBI) maintained a cautious monetary policy, balancing the need for inflation control while ensuring liquidity to support economic expansion.

The banking sector remained stable, with credit growth supporting businesses, especially in manufacturing and real estate. However, global uncertainties, including geopolitical tensions, supply chain disruptions, and changing trade policies, posed risks to Indias external trade and investment flows. Despite these challenges,

India continued to attract foreign direct investment (FDI), particularly in technology, renewables, and manufacturing, as companies sought to diversify supply chains.

Indias digital economy and start-up ecosystem continued to expand, with strong growth in fintech, e-commerce, and enterprise technology solutions. Government initiatives such as production-linked incentive (PLI) schemes supported domestic manufacturing, helping India position itself as a key global supplier in electronics and semiconductors. However, challenges such as skill shortages and regulatory uncertainties remained hurdles for businesses.

Looking ahead, the Indian economys trajectory will depend on the governments ability to manage inflation, stimulate private investment, and ensure job creation. Key policy decisions related to taxation, infrastructure spending, and social welfare will shape economic stability and growth in the coming years.

While the near-term outlook remains cautiously optimistic, long-term prospects continue to be driven by structural reforms, digitalization, and a focus on self-reliance in key industries.

The Reserve Bank of India (RBI) has projected Indias GDP growth at 6.5% for FY26 on similar lines as FY25, reflecting a stable economic outlook driven by strong domestic demand and policy support. Additionally, inflation for FY26 is expected to remain at 4.0%, indicating that while price pressures are easing, inflation management remains a key focus for monetary policy. The RBI has emphasized maintaining a balanced approach between growth and inflation control, ensuring that economic expansion continues without overheating. Key factors supporting growth include tax relief measures in the Union Budget, improved agricultural output, robust business sentiment, and continued policy support from the government. The RBI also plans to strengthen its economic forecasting capabilities using Artificial Intelligence (AI) and will continue its flexible inflation targeting framework to maintain macroeconomic stability.

Transformational Trends in Indias Consumer Economy

Indias consumer services economy is undergoing a profound transformation, driven by a digital-first mindset and a growing preference for curated, high- convenience experiences. While mobile apps and online platforms continue to scale, theres a parallel resurgence in out-of-home consumption—be it dining, entertainment, wellness, or travel. This reflects a deeper behavioural shift: for an emerging generation of consumers, spending is increasingly about lifestyle, identity, and shared experiences.

The rising popularity of premium cinemas, boutique fitness studios, destination dining, and experiential retail underlines a desire to go beyond and engage physically with services.

As digital and physical experiences blur, businesses are responding with hybrid models—online booking for offline services, personalized in-store journeys, and loyalty ecosystems that span both. The future of Indias consumer services economy isnt just digital—its experiential, connected, and deeply social. Several factors are propelling this growth and dynamic shift in consumer preferences.

Indias Middle Class: The Engine of Growth

By 2030, Indias economic landscape will shift from being bottom-of-the- pyramid driven to a middle-class-led economy. Nearly 80% of households will belong to the middle-income segment, a sharp rise from about 50% today. This expanding middle class will be the primary force behind consumption, contributing to 75% of total consumer spending, reshaping demand across industries and driving growth in premium and aspirational products.

Rising Incomes to Reshape Consumption Patterns

By 2030, 140 million households will enter the middle class, while 20 million will transition to the high-income segment. This upward mobility will fuel a 2-2.5x increase in spending on essentials like food, apparel, and housing, and a 3-4x surge in services such as healthcare, education, and entertainment.

Balancing More, Better, and New in Consumer Spending

By 2030, half of all incremental consumer spending will go towards buying more of the products and services people already use, reinforcing the importance of affordability. The remaining half will be split between premiumization—upgrading to higher-quality options—and category expansion, integrating new products and experiences into daily routines.

This shift will be most visible in food, personal care, Entertainment and digital

Millennials & Gen Z: The Power Consumers of 2030

By 2030, 77% of Indians will be born post1980s, making Millennials and Gen Z the dominant consumer force. These generations will be more affluent, digitally savvy, and brand-conscious, having grown up with unprecedented access to global products and services. While they will be eager to spend, they will also be highly discerning, demanding best- in-class offerings across categories, from fashion to automobiles.

Businesses will need to cater to these well-informed, experience-driven consumers, who prioritize quality, personalization, and social impact in their purchasing decisions.

We expect the population with income of more than US$ 10,000 to rise to over 100mn by 2027, growing at a 13% CAGR connectivity, driving a surge in demand for premium and innovative offerings.

Urban and Rural Aspirations Converge, Access Becomes the Key

The digital revolution has blurred the gap between urban and rural consumers, with small towns and developed rural areas exhibiting similar income levels and brand aspirations as larger cities. However, rural consumption remains constrained by inadequate infrastructure—roads, power, organized retail, and financial services. As physical and digital connectivity improve, along with innovative distribution models, rural Indias latent demand will be unlocked, driving significant consumption growth and expanding market opportunities across sectors.

Global Film Exhibition Industry

The global box office reached $30 billion in 2024, reflecting a 7% decline from the previous year. However, the second half of the year saw a 5% increase over 2023, driven by hits like Moana 2, Wicked, and Mufasa: The Lion King.

Inside Out 2 dominated the year with nearly $1.7 billion, followed by Deadpool & Wolverine at $1.3 billion. Disney was the only studio to surpass $5 billion in global revenue, bolstered by Moana 2, Kingdom of the Planet of the Apes, and Alien: Romulus. Other major successes included Despicable Me 4 ($969 million), Dune: Part Two ($714 million), and Godzilla x Kong: The New Empire ($571 million).

The domestic box office (US & Canada) fell 3% to $8.8 billion, while Chinas film market struggled, plummeting 23% year-over-year to $5.8 billion, marking its lowest since 2015 (excluding the pandemic) and 27% below pre-pandemic levels.

Indian Film Exhibition Industry

India is home to the worlds most prolific film industry in terms of volume, yet it remains significantly under-screened. With only 9,918 (company estimates) cinema screens serving a population of over 1.4 billion, India has one of the lowest screen densities globally—just 7 screens per million people, compared to over 60 in China and more than 100 in the U.S. This gap presents a massive opportunity for expansion, particularly as rising disposable incomes and a growing appetite for out-of-home entertainment drive demand for cinematic experiences across Tier 2 and Tier 3 cities. As consumer preferences evolve and the appetite for diverse, high- quality content increases, Indias exhibition sector is poised for structural growth, supported by both multiplex expansion and premium cinema formats.

Indian Box Office Performance in 2024 (Source: Ormax Media)

While 2024 wasnt a perfect year for cinema, it still offered plenty of rewarding experiences for movie lovers. In a year where cinema faced its share of challenges, few Indian films still managed to break new ground.

• The Indian box office grossed 11,833 Cr in 2024, making it the second-best year after 2023 (12,226 Cr).

• Hindi cinema saw a decline, with collections falling to 4,679 Cr from 5,380 Cr in 2023, and its market share dropping to 40%. Excluding dubbed versions of South Indian films, original Hindi films saw a sharp 37% decline. This was due to gaps in release calendar and lack of films from major superstars.

• Hollywood witnessed the steepest decline, with a 17% drop in gross collections compared to 2023. This was primarily due to the lingering impact of Hollywood strike of 2023 which caused a significant decline in the number of releases.

• Malayalam cinema doubled its market share from 5% to 10%, crossing 1,000 Cr for the first time. The outstanding success of Malayalam movies reinforces that audiences are seeking quality content. Tamil and Telugu industries maintained steady performance.

• Gujarati cinema recorded a remarkable 66% growth over 2023, second only to Malayalam cinema.

• Pushpa 2: The Rule was the highest- grossing film of 2024 with 1,403 Cr, including 889 Cr from its Hindi- dubbed version—the highest-ever for a Hindi film.

• Pushpa 2: The Rule, Kalki 2898 AD, and Stree 2 were the only films to surpass 500 Cr at the box office during CY 2024. (Chhaava released in Feb25 also managed to achieve this feat).

• India footfalls stood at 88.3 Cr (883 million), reflecting a 6% decline from 2023 and remaining below pre-pandemic levels.

• The Average Ticket Price (ATP) rose by 3% from INR 130 to INR 134, indicating stability compared to double-digit growth in previous years.

Noticeable trends in the Movie Exhibition Industry

• Changing dynamics of film content

Consumer preferences in India are evolving rapidly, influenced heavily by social media, which has become a powerful force in shaping viewing habits and driving content discovery. The traditional reliance on "star power" is gradually diminishing, as audiences increasingly prioritize strong storytelling, relatable characters, and fresh narratives. Post Covid, there has been a noticeable shift in consumer taste, fueled by greater exposure to global & multilingual content through streaming platforms, raising expectations for quality and authenticity. Additionally, the performance of film content has become more unpredictable, with volatility across quarters-some delivering breakout hits while others seeing subdued box office performance-highlighting the increasingly dynamic and taste- driven nature of the industry.

One of the key transformations is the rise of "Reel-filmmaking," a response to audiences shrinking attention spans. This technique embraces fast-paced storytelling, shorter scenes, and dynamic shot compositions-borrowing elements from short-form content culture. Editing styles are adapting to reflect this, with rapid cuts, non-linear storytelling, and split-screen techniques keeping viewers engaged.

Due to these factors, the industry is undergoing a fundamental rethink in content creation. Filmmakers are revisiting their scripts, prioritizing storytelling depth, and placing a stronger emphasis on casting. Instead of banking solely on star power, there is a growing demand for well-crafted narratives that resonate with audiences across demographics.

• Rise of Regional Films

Another defining trend post covid is the expansion of regional cinema out of its home territory especially into the Hindi speaking belt. Historically, the Hindi film industry dominated national conversations, but now, producers are increasingly investing in regional language films. This shift is driven by the success of Pan-India films, where Telugu, Tamil, Kannada, and Malayalam films have crossed linguistic boundaries to capture a national audience.

Recognizing this demand, Bollywood studios are backing regional productions, dubbing them into multiple languages, and crafting films that appeal to audiences across the country. Major Production companies are entering regional cinemas to make the most out of this trend. The success of films like Pushpa 2, Kalki, RRR, KGF 2 and Kantara has set a precedent- mass entertainers with strong cultural roots have the potential to become nationwide blockbusters.

• Emphasis on Theatrical Releases

Film Industry is witnessing a renewed interest in theatrical releases with the number of movies going for direct OTT release reducing significantly since Covid.

During Covid, direct to OTT was not a choice but a compulsion for Film production companies to sustain themselves. Now production houses are again prioritizing a theatrical release as streaming platforms are offering much lower returns, when compared to a traditional theatrical release. The potential for earning outsized returns is the highest when a movie is released theatrically.

• OTTs have shifted focus to profitability

o High Content Costs: OTT players are locked in a "content arms race," spending billions to retain subscribers—often without proportionate returns.

o Subscriber Saturation: Many major markets are now near saturation, with minimal room for exponential subscriber growth.

o Churn Rates: With easy opt-in/opt-out models, churn has become a major issue, increasing marketing costs to retain or reacquire users.

o Piracy: Unauthorized redistribution and downloads of content remain a major concern.

o Localization & Cultural Fit: Global platforms must tailor content to regional tastes, languages, and cultural sensitivities.

o Content Regulation: Supreme court in a recent ruling agreed with concerns about obscenity on OTT platforms and said that the Government should bring in legislative reform to curb it. Governments may impose content censorship or demand greater oversight.

Globally, studios are rethinking their distribution strategies, with a renewed emphasis on theatrical releases.

• Hybrid Distribution Models:

Many studios are now following a staggered release strategy. Theatrical first, followed by streaming or digital rental windows.

• Streaming-First Retraction:

Netflix, Amazon, and even Apple are investing more in limited theatrical runs to maximize ROI.

• Return of the Blockbuster Strategy: Studios are prioritizing fewer, higher-budget films with global box office appeal, versus the "quantity over quality" OTT model.

Interestingly, even legacy OTT franchises—once exclusive to streaming—are now making the leap to theatrical releases, acknowledging the enduring draw of cinemas (Mirzapur,

Haseen Dilruba 3).

• Customer Centricity

Multiplexes are constantly innovating to elevate the customer experience. This includes investing in cutting-edge technology like 3D, 4D, and even virtual reality experiences, ensuring a truly immersive escape. Additionally, comfortable seating, high-quality sound and visuals, and a wide range of food and beverage options are becoming the norm. With consumers seeking more premium experiences in India, demand for new formats like IMAX, 4DX, ICE are gaining more and more traction.

• Revenue Diversification Beyond Box Office

The Indian cinema landscape is witnessing a significant shift, with food and beverage (F&B) sales emerging as a vital revenue stream for multiplexes. This trend underscores a growing consumer inclination towards enhanced in-theatre dining experiences, transforming movie outings into comprehensive social events.

With rising disposable incomes and an increasing appetite for premium experiences, patrons are more willing to spend on gourmet snacks and beverages, making F&B a cornerstone of multiplex profitability. As cinema chains continue to innovate their culinary offerings, the integration of diverse and high-quality food options is becoming essential to attract and retain audiences in a competitive entertainment market.

• Surge in Innovation and VFX

As audience expectations evolve, studios are doubling down on innovation. Cutting-edge visual effects (VFX), AI-assisted filmmaking, and immersive storytelling techniques are driving new levels of engagement. High- concept films, sci-fi spectacles, and CGI-heavy productions are receiving larger budget allocations, as studios recognize the need to create event-worthy films that demand a theatrical viewing experience.This shift is also leading to a more collaborative approach, with international VFX firms partnering with Indian and regional studios to enhance production quality. The goal is clear—create larger-than-life spectacles that compete with Hollywood blockbusters while retaining local storytelling sensibilities

• Industry Consolidation & Multiplex Growth

The Indian cinema landscape has seen a dramatic shift over the years, marked by the steady decline of single-screen theatres and the rapid rise of multiplexes. In 1990, India had approximately 24,000 singlescreen theatres, but by 2025, this number has fallen to approximately 5,000. This transformation has driven significant industry consolidation, with multiplex chains emerging as dominant players. Multiplexes have redefined the movie-going experience by offering a premium ambiance and a wide range of food and beverage options, making cinema outings more appealing and enjoyable for audiences. As a result, they now command a significantly larger share of the market, fundamentally reshaping the industrys structure and consumer preferences.

Cinema is Not Dying—its Evolving

Despite the challenges, 2024 has proven that cinema is far from a declining industry. Instead, it is in the midst of an evolution—reshaping its economic model, embracing technological advancements, and redefining storytelling techniques. Theatrical experiences remain irreplaceable, innovation is at an all-time high, and the expansion of regional cinema is breaking new ground. Rather than fading away, cinema is adapting to the changing needs of audiences, proving its resilience in an era of rapid transformation.

Factors aiding the growth of Multiplexes in India

• A Growing middle class and increase in disposable income

As Indias per capita income is expected to rise from US$2,500 in 2023 to US$3,000 by 2025, the theatre-going audience is set to grow, driving investments in cinema infrastructure. This trend has been further supported by recent government tax reforms, including changes in the new tax regime announced in the Union Budget. Higher exemption limits, reduced tax rates in lower income slabs, and increased standard deductions are collectively expected to enhance take-home pay for a large section of the population. These measures, alongside growing employment opportunities and income levels, are contributing to higher discretionary spending, which is positively impacting consumption across sectors, including entertainment and lifestyle services.

• Expansion of Retail Infrastructure

The rapid growth of shopping malls across India, particularly in Tier-II cities, presents a significant opportunity for multiplex expansion. Malls provide a natural habitat for multiplexes, offering a convenient one-stop destination for shopping, entertainment, and dining

• Limited Out-of-Home Entertainment Options

In India, multiplexes remain one of the most affordable and accessible forms of out-of-home leisure when compared to theme parks, dining out, or vacations, making them a popular choice for entertainment.

• Adoption of Advanced Technologies

Innovations such as 3D and 4D screenings, along with immersive virtual and augmented reality content, are gaining traction.

These technological enhancements are attracting audiences seeking novel and engaging entertainment formats.

Company Overview & Performance in FY25

PVR INOX Limited (PVR INOX) is Indias largest multiplex player in India operating 1,743 screens across 352 properties in 111 cities in India and Sri Lanka as on 12th May25.

PVR INOX offers a diversified and premium cinema viewing experience through its formats, including Directors Cut Insignia LUXE IMAX ICE P[XL] BIGPIX ScreenX 4DX MX4D Playhouse Kiddles Onyx Sapphire and Club. The Company exhibits a variety of content to cater to the various customer segments in India. Of the total 1,743 screens as on 12th May25, these premium screens totalling to 268 screens contribute about 15.4% of the overall screen portfolio.

Apart from box office revenues, PVR INOX also generates revenue from nonbox office sources such as food and beverage sales, advertisement revenue, convenience fees, and income from movie production/distribution.

Box Office Performance during the year

In Q1 FY25, the Indian film industry saw a subdued performance overall, marked by a noticeable slowdown in Hindi film releases and box office traction. The quarter was impacted by external factors such as the general elections and the Indian Premier League (IPL), which led to a lighter release calendar and cautious scheduling by major studios. Bollywood underperformed, with several high- budget releases like Bade Miyan Chote Miyan, Chandu Champion, and Maidaan failing to meet box office expectations. Munjya emerged as a breakout success in the quarter and ended up grossing over 100 crores. Kalki released at the very end of June pulled in nearly 16% of the quarters total box office in just 4 days and ended up grossing over 1000 crores globally.

Q2 FY25 marked a strong recovery for the Indian film industry, with box office momentum picking up significantly after a muted first quarter. The release of Stree 2 proved to be a game-changer, emerging as an all-time blockbuster and drawing large audiences across the country. Kalki 2898 AD also continued its successful run, reinforcing the growing strength of Telugu cinema. On the international front, Hollywood made a strong showing in Indian theatres with Dead pool & Wolverine, which garnered solid business and strong audience reception. The combination of high-performing domestic and international titles helped restore footfalls and energize theatrical revenues during the quarter.

Q3 FY25 turned out to be a blockbuster quarter for the Indian film industry. Although October began on a quieter note with films like Jigra and Vicky Vidya Ka Woh Wala Video underperforming at the box office, the momentum shifted dramatically in November. Singham Again and Bhool Bhulaiyaa 3 delivered strong performances, drawing large crowds and reviving audience enthusiasm.

The quarter reached its peak with the release of Pushpa 2, which took the box office by storm, delivering a massive blockbuster run and setting new benchmarks in collections. Regional cinema also contributed significantly to the quarters success, with Tamil films like Amaran and Vettaiyan performing well and attracting wide audiences. The strong performance across languages reinforced the growing strength and diversity of Indian cinema, making Q3 one of the most successful quarters in recent past.

Q4 FY25 was relatively slow for the Indian film industry, with fewer major releases and lower overall box office traction. However, the quarter was highlighted by the exceptional performance of Chaava, which broke several records and emerged as a major blockbuster, providing a significant boost to an otherwise muted period. Alongside Chaava, films like Sky Force and Game Changer also delivered strong performances, contributing to the quarters overall collections.

Fiscal 2025 - An year of transformation for PVR INOX

FY25 was not a year of decline, but one of transformation. In a year marked by unprecedented content headwinds and industry volatility, the company transformed itself with a renewed focus on innovation and agility - positioning itself as a more resilient and forward-looking organization, ready to shape the future of cinema in 2025 and beyond.

The company had identified 3 key strategic priorities for fiscal FY25.

These 3 pillars over time would enable the business to improve ROCEs and shareholder return.

I. Operational Excellence

A. From Managing to Manufacturing Footfalls (Demand Generation)

B. Cost Optimization

C. Focus on profitable growth

II. Prudent Capital Allocation Strategy & Cash flow Management

A. Changing the growth model of the company by pivoting to an Asset Light model

B. Optimizing Capital Expenditure and improvement in Free Cash Generation

III. Reduce Debt

I. Operational Excellence

A. Demand Generation: From Managing to Manufacturing Footfalls

In FY25, the company moved from passive programming to active demand creation, transforming cinemas from film venues into dynamic experiential spaces — ready to host events, corporate programs & immersive formats of every kind.

i. Culture of entrepreneurship and Innovation: At a corporate level, innovation was made a non-negotiable priority — pushing teams to think beyond cinema and reimagine what PVR INOX could offer. Using consumer insights, a bouquet of new products and experiences were developed to entice audiences to cinema as well as enhance the overall guest experience.

Fresh concepts like Screen IT, Sensory Friendly Screenings and Seniors Day were born.

a) Focusing on Re-releases:

o Insight driven re-releases became a big business model and set new box office benchmarks as audience started enjoying them on the big screen.

o To address gaps in release calendar, the company strategically re-released classic films, leveraging nostalgia and high-quality content to drive attendance.

o Re-releases (such as Tumbbad, Sanam Teri Kasam etc.) contributed 71 + lac admissions and INR 124 crore to GBOC in FY25 (5.2% of total admissions and 3.5% of total GBOC).

o With lower film hire cost, this initiative helped optimize box office performance with better economics and proved to be a win-win for both PVRINOX and the producers.

b) SCREENIT:

Program was launched in Jan25.

It offers movie enthusiasts a personalized cinema experience through the PVR INOX app. Key features include:

o Customized Screenings:

Users can create or join personalized movie shows by selecting films from a diverse library of over 500 titles, choosing their preferred cinema, date, and time.

o Effortless Booking: To initiate a screening, users need to book a minimum of two tickets. They can then invite friends or join existing shows created by other movie enthusiasts.

o Community Engagement:

SCREENIT fosters community- driven events, allowing users to relive classics and fan favorites together, enhancing the communal aspect of movie-watching.

o Promote & Earn: Users can share unique promotional links for their created screenings. For every ticket booked through these links, they earn rewards, turning their passion for movies into a rewarding experience.

c) Flexi Show:

Launched in Dec24, the FLEXI Show ticketing model introduces a time-based refund system, empowering viewers with the choice to leave a movie anytime while still enjoying the value of their experience.

d) On-ground Engagement:

o Cinema teams were challenged to step outside their comfort zones, and own outcomes. Management seeded a fearless culture of experimentation — where innovation thrived and even failures became stepping stones to success.

o The extensive outreach initiatives included acquiring group bookings, hosting corporate events and gift card & passport sales. Furthermore, the teams reached consumers at their societies, high footfall areas and parks to influence cinema visitation. This became part of a hyperlocal demand strategy.

e) Bundle Offer (ticket & F&B):

The Company rolled out Bundled offer across the entire circuit allowing customers to avail 50% extra F&B value when booked along with movie ticket.

f) Movie Jockey (MJ):

The Company introduced Movie Jockey (MJ), a smart WhatsApp-based assistant designed to simplify the movie-going experience. Customers can use MJ to book tickets, order food & beverage, check gift card balance, explore upcoming films among others. It is available in six languages and supports major payment modes making a movie outing quick and convenient. It can be accessed by sending a "Hi" on WhatsApp to 8800989898.

ii. Brand & Category Development

o Even in a content-deficient year, the Company focused on building brand equity and category salience.

o Backed by consumer research, campaigns like Upar Dekho, Bada Dekho, and Fresh Dekho, Bada Dekho reignited the cultural connection with cinema, positioning it as an irreplaceable, shared experience in a digital-first world.

o The brand engaged the right voices for the right segments. From Orry — appealing to Gen Z — to Pankaj Tripathi — connecting with middle-aged audiences — campaign narratives were sharply segmented and resonated with over 80 million people.

o Innovative Movie Promotions & On ground activation - Leveraged innovative marketing techniques, including experiential activations, themed events, and influencer partnerships. Hosted interactive promotions, fan meetups, and product launches at theaters to enhance brand visibility.

o Partnership with Salesforce unlocked a new era of personalized, data- led marketing at scale, while PVR INOXs social media presence surged — becoming one of the most engaged cinema brands globally, driving advocacy and brand love.

iii. Smart Ticket Pricing Strategy:

o Keeping in mind the business and consumer sentiment, the company reengineered ticket pricing. The company adopted a dynamic approach — one that would allow it to capitalize on blockbuster films while still remaining accessible to price- sensitive audiences.

o Initiatives like Cinema Lovers Day (CLD) & National Cinema Day (NCD) and INR 99 pricing in key markets were successfully launched. Total 5 CLD/NCD during the year witnessed 3.4 mn footfalls at an occupancy of 39%.

o The company also adopted a unified box office technology platform (ShowBizz) enabling seamless implementation of dynamic, market-responsive pricing across locations.

o The company optimized for both value and volume — maximizing blockbuster weeks while tactically managing slower periods, all without diluting long-term brand positioning

o The result was a stable YoY ATP at INR 259, even in a year where content was soft and lacked tentpoles.

iv. F&B Expansion Strategy and Growth Drivers

Recognizing the critical role of food and beverage in driving margins, the Company reimagined this vertical with both creativity and commercial clarity.

o First owned food brand Dog Father (hot dog brand):

The company launched its first owned food brand Dog Father. It was created for journey within and outside the cinemas. This and other brands are currently being tested and pruned within the controls of cinema environment and soon would be seen making a mark outside.

o Roll out of Non vegetarian menu across INOX circuit:

Non vegetarian food was introduced at INOX sites.

It is now available across 116 INOX cinemas.

o Food Court JV with

Devyani: The company forged a joint venture with Devyani International to operate food courts. The first food court was opened in Mall of Kota,

Rajasthan in Dec24 and 9 more food courts are expected to open in FY26. Through this partnership the company has entered the pre-ticketed F&B segment. This initiative marks a significant shift from the traditional post-ticketed F&B model, which is largely dependent on movie line-ups, to a more stable and predictable revenue stream.

o F&B Home delivery: In FY25 home delivery of cinema snacks became a meaningful revenue stream - average aggregator led sale per month increased by 20% to ~INR 20 mn in FY25.

o The company also pushed the F&B engine beyond the four walls of the cinema — entering outdoor catering and corporate events.

v. Advertising Income Resilience

o In an environment where media sentiment was low and footfalls unpredictable, the Company refused to let advertising revenues decline. Media sales team was tasked to go harder, think smarter, and build deeper partnerships with advertisers and media agencies, re-emphasising the unique advantage and tailor-made opportunities of cinema advertising.

o Thanks to this new mindset, a pre-sales team was created to offer customized advertising solutions to clients. Long-term strategic deals were signed with some iconic brands.

o The company also adopted a new outsourced sales model in certain South Indian markets — a risk-mitigating move that has now become a scalable solution for the future.

o The company has been credited for the focus on in-cinema advertisement at an industry level. Refer below an excerpt from the latest EY FICCI Media & Entertainment report released in March 2025.

a. Employee cost

i. The company adopted a leaner organization structure. Moved to a single CEO structure by doing away with the India A, India B bifurcation.

ii. Optimized manning across cinemas in line with content/footfall flow

b. Electricity

Tight control on unit consumption resulting in reduction in electricity cost despite of increase of unit rates across the states.

i. Efficiency achieved due to recommissioning of Chiller plants

ii. Installation of rooftop solar panels in 18 cinemas as of March 31, 2025. (plans are underway to install them in another 47 cinemas in FY26)

c. Tight control on all other fixed costs like Marketing, Traveling & Conveyance, Insurance, Professional, Communication, Miscellaneous expenses resulted in significant savings in fixed costs.

C. Focus on Profitable Growth

o During the year, the company opened 77 new screens.

o In line with the companys strategy of improving the performance of the existing circuit, the company had taken a strategic decision to exit loss making properties housed in malls which have reached the end of their life, with little hope of any revival.

o In FY25, the company exited 72 under-performing screens across 21 cinemas.

o These exits resulted in EBITDA savings of ~INR 80 mn.

In-cinema advertising grew 20%

o INR9 billion was generated from cinema advertising in 2024, a 20% growth over 2023

o The growth is attributed to increased focus on such sales by the merged PVR-INOX exhibition chain, and the scarcity of avenues to reach affluent theater-going audiences

B. Cost Optimization Measures

In FY25, the company focused on cost optimization. Every legacy assumption was questioned, challenging the organization to do more with less.

1. Rent & CAM: Through tough but necessary negotiations with real estate developers, Rentals and CAM charges were renegotiated aggressively resulting in total savings of INR 567 mn across 68 cinemas. In addition to these savings, negotiations with developers also yielded the following benefits:

a. Reduction in capital intensity

through commitment from Developers for contribution towards capex of INR 1,218 mn

b. Recovery in Security Deposits of INR 143 mn

2. Fixed Costs other than Rent & CAM: Excluding Rent and Cam, the company has managed to reduce its fixed costs per screen by ~1% during FY25, despite of a cost inflation of 5% in the economy.

II. Prudent Capital Allocation & Cash flow management

Amidst a volatile business environment, the Company exhibited prudent capital allocation and strong cash flow management, maintaining healthy liquidity levels throughout the year. These proactive measures ensured operational stability and supported strategic investments without compromising financial flexibility.

A. Changing the growth model of the company by pivoting to an Asset Light model

o Perhaps the most defining shift in FY25 was the companys decision to shift towards an asset-light model that enables expansion with agility. This wasnt about shortterm savings; it was about futureproofing the business under a new, smarter paradigm.

o By successfully leveraging the companys scale, market leadership, and brand equity, the company has partnered with developers to either jointly invest in new cinemas or do franchise- owned and company-operated (FOCO) cinemas.

o In FY25, under the new strategy the company has signed a total of 101 screens across 23 cinemas. Out of these 55 screens across 12 cinemas are under the Asset Light Model and 46 screens across 11 cinemas are under the FOCO model.

o Most of these cinemas will come up over the next 12-24 months. In FY26, ~50% of the new screen additions will be under either the FOCO or Asset Light model.

o Under the Asset light model, capex per screen should reduce to INR 15 - 20 mn per screen which is a reduction of 4550% when compared to the earlier lease model.

B. Optimising Capital Expenditure and Free Cash Generation

o The company significantly controlled its capital expenditure, reducing it from INR 6,344 mn in FY24 to ~INR 3,335 mn in FY25.

o Effective working capital management ensured healthy liquidity throughout the year, even in the face of operating volatility.

o Together, these measures reflect a disciplined and adaptive approach — enabling the company to remain resilient in FY25, while laying a stronger financial foundation for future growth.

III. Reduction in Debt

o Despite earnings volatility, the company continued to strengthen its balance sheet by reducing Net Debt from INR 12,940 mn on March 31, 2024, to INR 9,522 mn on March 31, 2025. Since the merger, a total net debt reduction of INR 4,782 mn has been achieved.

This sustained improvement reflects a disciplined approach to capital management, prudent cost controls, and a focus on cash flow optimization - ensuring financial stability even amid industry headwinds.

o Credit Rating: Even in an adverse operating environment with a decline in operating profit in FY25, the company has managed to maintain a credit rating AA with stable outlook from Crisil and India Ratings.

Scaling Adjacencies: Driving Value Beyond Core Exhibition

i. Outperformance in Film Distribution Business housed under PVR INOX Pictures

o Post-merger, the company recognized the long term potential of film distribution business and its synergies with the combined merged circuit of PVR and INOX chains.

o In order to capture this and grow the distribution business housed in PVR INOX Pictures, the company had invested INR 500 mn in equity capital in FY24.

o In FY25, this enabled PVR INOX Pictures to distribute some of the biggest theatrical releases, enhancing the scale and profitability of the business and establishing a significant market presence.

o Posters of the Top 5 movies distributed by PVR INOX Pictures in FY25 given below.

o For FY25, Revenue has grown by 72% from INR 2,236 mn in FY24 to INR 3,853 mn in FY25.

o PBT has more than doubled from INR 84 mn in FY24 to INR 182 mn in FY25

ii. Zea Maize - Building a Scalable Snacks Brand

o As part of the strategy to grow the gourmet popcorn and snacks brand 4700 BC housed in Zea Maize, the management had committed to invest and support the brands long term potential.

o In FY25 PVR INOX invested ~INR 447 mn in Zea Maize.

The investment has been used to increase production capacity for existing products, increase presence across retail outlets, hire senior talent across leadership roles in sales, operations and marketing.

o These initiatives have started to yield results, with Zea Maizes revenue growing by 35%, from INR 758 mn in FY24 to INR 1,020 mn in FY25 — marking a significant step forward in scaling the business.

o Zea Maize is now poised for its next phase of growth, driven by deeper distribution reach, expansion into general trade and modern retail, and diversification into adjacent snacking categories. This will require enhanced retail distribution capabilities and sustained marketing efforts.

Portfolio Expansion during the year:

PVR INOX opened 77 screens across 11 cinemas during FY24. The details are as follows.

Sr. No.	Name of Cinema	Region	City	State	Opening Date	Screens	Seats
1	PVR Forum Mall, Kochi	South	Kochi	Kerala	10-Apr-24	9	1,489
2	INOX Phoenix Market City, Bengaluru (Mall of Asia)	South	Bengaluru	Karnataka	11-Apr-24	14	1,997
3	PVR KOPA, Koregaon Park, Pune	West	Pune	Maharashtra	8-May-24	7	751
	PVR Ambience Gurgaon (Experience Zone) (1)	North	Gurugram	Haryana	9-May-24	4	397
4	INOX Urban Square Udaipur	West	Udaipur	Rajasthan	30-May-24	6	1,009
5	PVR Machlipatnam, Andhra Pradesh	South	Machilipatnam	Andhra Pradesh	31-May-24	3	872
6	PVR LIDO Mumbai	West	Mumbai	Maharashtra	31-May-24	3	326
7	INOX Prism, Hyderabad	South	Hyderabad	Telangana	27-Jun-24	4	950
8	PVR Palladium, Ahmedabad	Central	Ahmedabad	Gujarat	1-Aug-24	9	1,283
9	PVR PP Mall, Mohali	North	Mohali	Punjab	6-Sep-24	7	1,022
10	PVR Alveal, Coimbatore	South	Coimbatore	Tamil Nadu	2-Oct-24	5	894
11	PVR Mall of Dehradun (Pacific)	North	Dehradun	Uttarakhand	13-Dec-24	6	937

(1) 4 screens were added to our existing cinema in Ambience Mall, Gurgaon

Screens shutdown: With a focus on profitability, the company shut down 72 screens across 21 cinemas during the year. These properties are loss making, or housed in malls which have reached the end of their life cycle with little hope of any revival.

Strengths

• Market Leadership: Dominant player with

a wide national footprint across metros, Tier 1, j and Tier 2 cities. ;

• Diversified Formats: Robust mix of formats - Mainstream, Premium (Directors i

Cut, Luxe, Insignia), and Experiential (IMAX, : 4DX, ScreenX, ICE). ;

• Strategic Locations: Cinemas located in high footfall urban centers and malls. ;

• Developer Relationships: Strong, long-standing partnerships with real estate developers.

• Guest-Centric Approach: Focused on delivering superior and immersive customer experiences.

• Strong Brand Equity: High consumer trust and brand recall, especially in premium urban catchments.

• Experienced Management: Promoters and leadership team with deep industry knowledge. ;

• Operational Efficiency: Proven ability to optimize fixed costs and maximize SPH (Spend per Head).

• Tech-Driven Personalization:

Use of AI/ML in CRM, dynamic pricing, and content targeting.

• Strategic Alliances: Tie-ups with distributors,* producers, ticketing platforms, F&B brands, advertisers enhancing monetization.

Challenges

• Weak Piracy Enforcement: Inadequate piracy laws impacting theatrical revenues

• Real Estate Bottlenecks: Sluggish commercial developments delaying expansion

• Regulatory Hurdles: Complex and lengthy approval processes for new screens

• Changing Preferences: Evolving consumer behaviour toward content

• Content Volatility: Inconsistent availability of high-quality content

• Footfall Seasonality: Business concentrated around weekends, holidays, and blockbuster releases

• High Capital Intensity: Screen expansion, renovation and tech upgradation require significant capital outlay

• Talent Retention in Operations:

Retaining trained frontline staff in operations remains a challenge

• Urban Congestion: Access to cinemas in major cities is affected by traffic and infrastructure issues

Opportunities

• Tier 2/3 City Expansion: Indian market remains significantly underscreened. There are many untapped markets with rising aspirations and improving infrastructure.

• Youth-Driven Demand: Young population fueling demand for entertainment experiences.

• Regional Content Boom: Success of dubbed and original regional language content.

• Higher Disposable Incomes: Growing middle class increasing spend on entertainment.

• Alternative Content: Scope for screening non-film content-live sports, e-sports, concerts, etc.

• Experiential Cinema: Growing consumer interest in luxury and immersive cinema experiences.

• F&B Monetization: Premium food and beverage offerings gaining traction

• Corporate Bookings: Rising trend of companies using cinemas for internal events, product launches.

• Digital Marketing: Deeper engagement through app push notifications, geotargeting, and personalized offers.

Threats

• Pandemic Risk: Potential disruptions due to health- related or external shocks.

• Shift to Live Experiences: Growth in live events, stand-up, and cultural performances.

• Censorship & Restrictions: Risks from bans or delays by the Central Board of Film Certification.

• Content Pipeline Delays: Impact from slower film production or fewer theatrical releases.

• OTT Disruption: Continuous improvement in content and user experience of OTTs reducing cinema dependence.

• Rising Input Costs: Inflationary pressures on real estate rents, manpower, and utilities.

• Data Privacy Risks: Increasing scrutiny on data security and compliance for digital engagement platforms.

• Policy Uncertainty: Changes in GST rates, entertainment tax policies, or censorship laws.

• Cybersecurity Threats: As tech integration increases, risk of data breaches or cyberattacks on ticketing/ payment systems.

Financial Performance & Analysis

The discussion in this section relates to the standalone financial results for the year ended March 31, 2025. The financial statements of the Company have been prepared under the Indian Accounting Standards (Referred to as Ind AS), prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the standalone financial statements.

The table below gives an overview of the standalone financial and operating results for FY 2024-25 (FY25) compared with FY 2023-24 (FY24). Further comparative financials after adjusting for the impact of Ind AS 116 have also been reproduced below for both financial years. The MD&A section below has been drafted based on Ind AS 116 adjusted numbers for ease of understanding.

	FY 2024-25		FY 2024-25		FY 2023-24		FY 2023-24
Particulars (INR mn)	Reported	IND AS 116 Adjustment	Adjusted for INDAS 116	% of Revenue	Reported	IND AS 116 Adjustment	Adjusted for INDAS 116	% of Revenue	Growth/ De-growth
Income
Revenue from operations	54,424		54,424	98%	58,971		58,971	98%	-8%
Other income	1,637	-790	847	2%	1,514	-592	922	2%	-8%
Total Income	56,061	-790	55,271	100%	60,485	-592	59,893	100%	-8%
Expenses
Movie exhibition cost	13,111		13,111	24%	15,000		15,000	25%	-13%
Consumption of food and beverages	4,315		4,315	8%	4,744		4,744	8%	-9%
Employee benefits expense	6,461		6,461	12%	6,295		6,295	11%	3%
Other operating expenses	15,219	11,598	26,817	49%	14,997	10,937	25,934	43%	3%
Total Expenses	39,106	11,598	50,704	92%	41,036	10,937	51,973	87%	-2%
EBITDA	16,955	-12,388	4,567	8%	19,449	-11,529	7,920	13%	-42%
EBITDA Margin (%)	30%		8%		32%		13%		-500 bps
Finance costs	8,060	-6,185	1,875	3%	7880	-6,033	1,847	3%	2%
Depreciation and Amortisation expense	12,646	-7922	4,724	9%	12,051	-7452	4,599	8%	3%
Profit Before Tax	-3,751	1,719	-2,032		-482	1,956	1,474		NM
PBT Margin (%)	-7%		-4%		-1%		2%		-600 bps
Tax expense	-982	441	-541	-1%	-125	506	381	1%	NM
Profit AFter Tax	-2,769	1,278	-1,491		-357	1,450	1,093		NM
PAT Margin (%)	-5%		-3%		-1%		2%		-500 bps
Operating Numbers
Locations (Nos.)	348		348		358		358		-3%
Screens (Nos.)	1,714		1,714		1,709		1,709		0%
Admits (Mn)	136		136		151		151		-10%
Gross ATP	258		258		258		258		0%
Gross SPH	134		134		132		132		1%
Occupancy %	23.0%		23.0%		25.6%		25.6%		-260 bps

I. REVENUE:

Total Revenue decreased by 8% or Rs. 4,622 mn during the year ended March 31, 2025 as compared to previous year ended March 31, 2024.

Particulars (INR Mn)
Adjusted for INDAS 116	FY 2024-25	FY 2023-24	% Change
Income from sale of movie tickets	29,424	32,582	-10%
Sale of food and beverages	17,335	18,864	-8%
Advertisement income	4,461	4,508	-1%
Convenience fees	2,106	2,172	-3%
Other operating revenue and Other Income	1,945	1,767	10%
Total	55,271	59,893	-8%

A. Income from Sale of Movie tickets

Income from the sale of movie tickets decreased by 10% or Rs. 3,158 mn during the year ended March 31, 2025, as compared to the previous year ended March 31, 2024. The decrease was mainly due to the decrease in admissions by 10%. Average ticket price was flat at INR 258 in both FY25 and FY24.

B. Income from Sale of Food and Beverages

Income from the sale of Food & Beverages decreased by 8% or Rs. 1,529 mn during the year ended March 31, 2025, as compared to the previous year ended March 31, 2024. The decrease was mainly due to 1% increase in SPH and 10% decrease in admissions in FY25 as compared to FY24.

C. Advertising Revenue

Advertising revenue decreased marginally by 1% or Rs. 47 mn during the year ended March 31, 2025, as compared to the previous year ended March 31, 2024.

D. Convenience fees

Convenience fees decreased by 3% or Rs. 66 mn during the year ended March 31, 2025, as compared to the previous year ended March 31, 2024. A mix of factors including the year on year drop in admissions and change in proportion of online ticket sales has led to the same.

E. Other operating Revenue and Other Income

Other operating revenue including other income increased by 10% or Rs. 178 mn during the year ended March 31, 2025, as compared to the previous year ended March 31, 2024. It includes income from movie production and distribution, Food court Income, Gaming Income, Management fees,

Interest Income, and other nonoperating Income.

II. Expenses

Total expenses decreased by 2% or Rs. 1,116 mn during the year ended March 31, 2025, as compared to the previous year ended March 31, 2024. Total expense comprised of the following:

Particulars (INR Mn)
Adjusted for INDAS 116	FY 2024-25	FY 2023-24	% Change
Variable Cost
Movie exhibition cost	13,111	15,000	-13%
Consumption of food and beverages	4,315	4,744	-9%
Total Variable Cost	17,426	19,744	-12%
Fixed Cost
Employee benefits expense	6,461	6,295	3%
Rent and CAM	15,898	15,128	5%
Electricity and Water charges	3,921	3,826	2%
Other operating expenses	6,998	6,980	0.3%
Total Fixed Cost	33,278	32,229	3%
Finance Cost & Depreciation
Finance Cost	1,875	1,847	2%
Depreciation & Amortization Expense	4,724	4,599	3%
Total Cost	57,303	58,419	-2%

A. Movie Exhibition cost

Movie Exhibition cost decreased by 13%, or Rs. 1,889 mn, during the year ended March 31, 2025, compared to the year ended March 31, 2024, primarily due to a decrease in revenue from the sale of movie tickets. This cost is fully variable and linked to the sale of movie tickets.

Particulars	FY 2024-25	FY 2023-24
Movie Exhibition cost (as a % to Box office Revenue)	44.6%	46.0%

B. Consumption of food and Beverages

Consumption of food and beverages decreased by 9%, or Rs. 429 mn during the year ended March 31, 2025, compared to the year ended March 31, 2024, primarily due to a decrease in revenue from the sale of food and beverages. This cost is fully variable and is linked to the sale of Food & Beverages.

Particulars	FY 2024-25	FY 2023-24
Cost of Goods sold (as a % to Food & Beverages Revenue)	24.9%	25.1%

C. Employee Benefit Expenses

Employee benefit expenses increased by 3%, or Rs. 166 mn, during the year ended March 31, 2025, compared to the year ended March 31, 2024, primarily on account of minimum wage inflation across different states and the increments given in FY25. It has also increased on account of the new screens opened in FY25.

D. Rent and Common area maintenance (CAM)

Rent and CAM expenses increased 5%, or Rs. 770 mn, during the year ended March 31, 2025, compared to the year ended March 31, 2024. It has increased as per contracted terms for operational properties and has also increased on account of the new screens opened in FY25.

E. Electricity & Water Charges

Electricity & Water expenses increased by 2%, or Rs. 95 mn, during the year ended March 31, 2025, compared to the year ended March 31, 2024. It has increased on account of increase in fixed charges in various states and the new screens opened in FY25.

F. Other operating expenses

Other operating expenses primarily include Repairs and maintenance, Marketing expenses, Rates and taxes, Security service charges, Travelling and conveyance, Legal and professional fees, and other expenses. This expense has increased by 0.3% or Rs. 18 mn for the year ended March 31, 2025, as compared to March 31, 2024. This marginal increase was on account of incremental impact from new properties that were opened in FY25.

G. Finance cost

Finance Cost includes Interest on Debentures, Term loan, Banks, and other financial charges. Finance cost increased by 2% or Rs. 28 mn for the year ended March 31, 2025, as compared to March 31, 2024.

H. Depreciation and amortisation expense

Depreciation and amortisation expense increased by only 3% or Rs. 125 mn for the year ended March 31, 2025, as compared to March 31, 2024, primarily on account of new screens added in FY24, and accelerated depreciation on screens that were loss making and were shut down.

Balance Sheet

The following table set forth selected items from the standalone Balance sheet:

Particulars (INR Mn)	March 31, 2025	March 31, 2024	Growth/
	Reported	Reported	De-growth
Assets
Non-current assets	1,53,490	1,59,577	-4%
Current assets	8,659	8,287	4%
Total	1,62,149	1,67,864	-3%
Equity and liabilities
Equity	70,708	73,409	-4%
Non-current liabilities	66,752	71,186	-6%
Current liabilities	24,689	23,269	6%
Total	1,62,149	1,67,864	-3%

I. Non-Current Assets

Non-Current Assets includes Property, Plant and Equipment, Goodwill, Intangible Assets, Capital work-in-progress, Interest in Joint ventures, Security deposits to mall developers, Deferred tax assets, and other noncurrent assets.

II. Current Assets

Current Assets include Inventories, Trade Receivables, Cash and cash equivalents, and other current assets. Primarily the increase is on account of increase in cash and equivalents held by the Company

III. Equity

Equity comprises of Equity share capital and Reserves and surplus.

IV. Non-current Liability

Non-Current liability includes Borrowings, the non-current portion of Gratuity and leave encashment liability, deferred tax liability, and other non-current liabilities.

V. Current Liability

Current liability includes Short term Borrowings, Trade payables, other financial liabilities, current portion of Gratuity and leave encashment, and other current liabilities. Primarily the decrease is on account of payments of Trade Payables.

Ratios

Particulars	% Change	Units	FY 2024-25	FY 2023-24
Current Ratio	Total Current Assets / Total Current Liabilities	times	0.4	0.4
Debt - Equity Ratio	Total Debt / Total Equity	times	0.2	0.2
Debt Service Coverage Ratio	[Loss Before Tax + Dep & Amort. + Finance costs - Other Income] / [Finance Costs*+Principal Repayment of Long Term Debt]	times	2.4	4.0
Return on Equity	Loss for the Year / Average Total Equity	o/ %	-3.8%	-0.5%
Inventory Turnover Ratio	Consumption of F&B / Average Inventory (F&B)	times	10.0	11.9
Trade Receivables Turnover	Revenue from Operations / Average Trade Receivables	times	26.3	32.3
Trade Payables Turnover	[Exhibition Cost + COGS + Other Operating Expenses] / Average Trade Payables	times	4.8	6.2
Net Capital Turnover	Total Income / [Total Current Assets -Total Current Liabilities ]	times	-3.5	-4.0
Net Profit Ratio	Loss for the Year / Total Income	o/	-4.9%	-0.6%
Return on Capital Employed	EBIT = [Loss Before Tax + Finance Costs] / Capital Employed**	o/	16%	23%
Return on Investments	Income Generated from Investments / Average Investments	O/ %	13%	9%

Notes:

1) For computing above ratios reported standalone numbers are considered.

2) Ratios include impact of Ind AS 116 Leases.

* Interest on debentures, term loans and bank and others

** Total Equity +Total Borrowings-Other Intangible Assets - Goodwill

Commitment to Corporate Governance Excellence

PVR INOXs unwavering commitment to corporate governance is reflected in the long-standing value created for stakeholders across the legacy of both PVR and INOX. The company adheres to a robust governance framework comprising comprehensive policies and procedures formulated by the Board in consultation with external experts, ensuring full compliance with legal and ethical standards.

At the core of this framework is a focus on sustained business excellence and the creation of long-term shareholder value through principled conduct. Transparency, accountability, and fairness are embedded in every facet of the companys operations, guiding its engagements with shareholders, employees, regulators, lenders, and other stakeholders.

By upholding the highest standards of ethical business practices, PVR INOX continues to reinforce investor confidence, foster stakeholder trust, and drive sustainable corporate value.

Internal control systems and their adequacy

PVR INOX is committed to operating as an efficient and well-governed enterprise. To this end, the Company has established a comprehensive and robust internal control framework designed to ensure effective governance, regulatory compliance, asset safeguarding, error and fraud prevention, and the accuracy and integrity of financial reporting. These controls are appropriately tailored to the scale and complexity of our operations.

The Audit Committee plays an active and vigilant role in overseeing the internal control environment. It works in close coordination with the internal auditors, statutory auditors, and management to address any areas of concern and ensure timely remediation.

During the year, a comprehensive review of our internal controls was undertaken, and no material weaknesses were identified in either the design or operational effectiveness of these controls that warranted disclosure.

To further strengthen our internal governance, we have engaged KPMG as our independent internal auditor. Audits are conducted in alignment with a risk-based annual audit plan approved by the Audit Committee. These audits cover critical functions, including operations, finance, procurement, marketing, employee engagement, and customer experience management.

In addition to centralized audits, Protiviti India has been appointed to conduct periodic audits across our cinema locations throughout the year, ensuring control effectiveness at the ground level.

The Audit Committee thoroughly reviews all internal and statutory audit reports, monitors the implementation of recommendations, and holds regular interactions with statutory auditors to assess the adequacy of internal controls. It also provides regular updates to the Board of Directors on key findings and significant observations.

Following a formal evaluation under Section 177 of the Companies Act, 2013 and Clause 18 of the SEBI Listing Regulations, 2015, the Audit Committee has confirmed that the internal financial controls of the Company were adequate and operating effectively as on March 31, 2025. This conclusion is further corroborated by the auditors report on internal financial controls.

Risk management

In accordance with Regulation 17(9) of SEBI (LODR) Regulations, 2015, PVR INOX has established a well-structured and proactive Risk Management framework designed to identify, assess, monitor, and mitigate potential risks that may impact the Companys operations and long-term value creation. The Board of Directors oversees the Companys risk management practices and ensures that appropriate mitigation strategies are in place.

The COVID-19 pandemic underscored the criticality of a dynamic risk response mechanism, prompting an enhanced focus on strategic and operational risks. The Board, through its committees and senior management, continuously reviews emerging risks and guides the business on resilience measures.

Key Risk Categories and Mitigation Measures

1. Content Risk

Description: The Companys business model is fundamentally dependent on a consistent pipeline of film content. Any disruption in the release calendar or limited availability of engaging content may adversely affect revenue and profitability.

Mitigation:

• Re-releases of Iconic Films:

Strategic re-releases of classic films to drive footfalls with lower content acquisition costs.

• Alternate Content Programming: Regular scheduling of live sports, concerts, anime films, and stand- up comedy shows.

• Special Curation: Thematic festivals and targeted screenings (e.g., Oscar Week, Valentines Day, Rajnikanth specials) to attract diverse audience segments.

2. Political and Economic Risk

Description: Disruptions due to political instability or economic downturns can reduce discretionary consumer spending and impact box office performance.

Mitigation:

• Proactive monitoring of macroeconomic indicators and consumer sentiment.

• Introduction of dynamic pricing models, bundled offers, and promotions to retain footfalls during downturns.

3. Reputation Risk

Description: Negative customer experiences or service failures can lead to adverse publicity and longterm brand erosion.

Mitigation:

• Regular training of staff and strict adherence to customer service SOPs.

• Strong feedback and grievance redressal mechanisms.

• Investment in advanced cinema technologies (IMAX, 4DX, ICE) and high-quality F&B offerings.

4. Business Model Change Risk

Description: The rapid shift in consumer media consumption due to digital platforms poses structural risks to traditional exhibition models.

Mitigation:

• Adoption of experiential formats such as 4DX,

SCREENX, ICE, IMAX etc.

• Ongoing market research to track evolving customer preferences and adapt offerings accordingly.

5. Litigation Risk

Description: The Company may face legal risks arising from commercial disputes, employment issues, or regulatory non-compliance.

Mitigation:

• Strong internal compliance controls and contractual safeguards.

• In-house legal team supported by reputed law firms.

• Centralized monitoring and proactive resolution of legal matters.

6. Property Risk

Description: Physical assets of the Company may be exposed to natural disasters or security threats.

Mitigation:

• Comprehensive insurance coverage for fire, flood, terrorism, and other property risks.

• Adherence to safety and disaster recovery protocols at all sites.

7. Regulatory and Compliance Risk

Description: Varying state- specific regulations across India expose the Company to compliance challenges.

Mitigation:

• Dedicated compliance team ensuring adherence to tax, licensing, health & safety, data privacy, and environmental norms.

• Periodic audits and reviews to ensure alignment with applicable laws.

8. Interest Rate Risk

Description: Variability in interest rates can impact borrowing costs and financial performance.

Mitigation:

• Balanced portfolio of fixed and floating rate instruments.

• Ongoing review of interest rate trends and optimization of debt structure.

9. Currency Risk

Description: Exposure to foreign exchange volatility may affect certain business transactions.

Mitigation:

• Majority of transactions conducted in Indian Rupees, limiting currency risk.

• Hedging not pursued due to limited exposure.

10. Credit Risk

Description: Potential default by counterparties can lead to financial loss.

Mitigation:

• Use of Expected Credit Loss (ECL) models and provision matrices.

• Continuous monitoring of receivables and customer creditworthiness.

11. Liquidity Risk

Description: Inability to meet financial obligations in a timely manner may impact business continuity.

Mitigation:

• Use of advanced liquidity planning tools.

• Balanced approach combining bank overdrafts, loans, debentures, and lease financing.

• Post-pandemic policy to maintain adequate liquidity buffers at all times.

12. Technology and Cybersecurity Risk

Description: As PVR INOX increasingly digitizes operations (ticketing, loyalty programs, CRM, payment gateways), the risk of data breaches, system outages, and cyberattacks becomes more pronounced. Any compromise of customer data or operational downtime could damage reputation and result in financial and legal consequences.

Mitigation:

• Implementation of enterprise- grade cybersecurity protocols and firewalls.

• Regular vulnerability assessments, penetration testing, and IT audits.

• Compliance with data privacy regulations (e.g., DPDP Act, GDPR as applicable).

• Incident response protocols and data backup/recovery systems.

13. Environmental, Social & Governance (ESG) Risk

Description: Growing investor, regulatory, and public expectations around ESG can create reputational and compliance risks, especially around environmental sustainability and corporate responsibility.

Mitigation:

• Adoption of energy-efficient equipment and waste management protocols at cinemas.

• Green initiatives like solar power, water conservation, and paperless ticketing.

• ESG performance tracking and sustainability disclosures aligned with global frameworks (e.g., GRI, BRSR).

14. Vendor and Supply Chain Risk

Description: Dependence on third-party vendors for services such as F&B, equipment maintenance, security, and IT support can disrupt operations if vendors underperform or face their own constraints.

Mitigation:

• Multi-vendor strategy to reduce dependency.

• Strict SLAs, regular audits, and vendor performance tracking.

• Strategic sourcing to avoid over-concentration in specific geographies.

15. Talent Availability and Attrition Risk

Description: High attrition in frontline roles (F&B, ticketing, floor management) and shortage of skilled talent for specialized functions (technology, marketing) can impact service quality and operational efficiency.

Mitigation:

• Employee engagement programs, training, and career path planning.

• Partnerships with hospitality and training institutions.

• Incentives and recognition programs to reduce attrition.

16. Public Sentiment & Cultural Sensitivity Risk

Description: In Indias diverse sociopolitical landscape, films or cinema advertisements may trigger regional, cultural, or religious backlash-leading to protests, temporary closures, or reputational harm.

Mitigation:

• Robust content screening policies and advisory panels.

• Regional marketing localization and community engagement.

• Strong coordination with local authorities and law enforcement.

17. Technological Obsolescence Risk

Description: Rapid changes in cinema technology (projection, sound, immersive formats) can render current infrastructure outdated, affecting audience expectations and competitiveness.

Mitigation:

• Ongoing capex plans for upgradation to latest available technology

• Partnerships with global tech providers (e.g., IMAX, Dolby, Christie) for timely access to innovation.