India’s largest cinema chain, PVR, which has 734 screens across the country, is looking at operating 1,000 screens by 2020 end. In an interview with Fortune India, Nitin Sood, chief financial officer, PVR, who has led some major acquisitions for the company, spoke about the integration process it undertakes after acquiring a company. He also spoke about the impact of the recent cut in the goods and services tax (GST) on cinema tickets, besides the company’s plans to enter markets abroad in 2019.
Edited excerpts:
Recently, the government reduced the GST on movie tickets. How did you take it especially since cinema exhibitors have long been vocal about this?
This move brings joy to the entire film fraternity. It is a positive step in the right direction and will enable India’s exhibition sector to expand further by making quality entertainment screens available across many more cities and towns in the country. We appreciate the government’s decision to enable entertainment accessible to the majority and commit to continue with our efforts in the growth of the Indian entertainment industry to its full potential.
What are the other regulatory challenges that you continue to face?
In the past year with increased GST rates coupled with local body entertainment tax, the cinema exhibition industry witnessed challenges in attracting cinema viewers. The cut in cinema tickets cost will enable industry players to invest in the latest technology and business innovations, restoring the audience’s faith in the Indian entertainment industry. The government says that we are the poor man's entertainment zone and on the other hand, we have been put in the sin or the luxury category. Hence, everybody is targeting us. Chennai went ahead and put a local body tax for other states to follow. And of course, there is slow real estate development in the country and we’re entirely dependent on that. This puts a lot of pressure on us.
You have been on an acquisition spree with SPI Cinemas in the south, DT Cinemas in Delhi and Cinemax. What’s the first thing that you do after acquiring a company and how does it play out?
The first challenge after acquiring is to integrate with the company culturally. Everyone is concerned about what’s going to happen to their day-to-day life. Our biggest challenge is to ensure that the existing team stays and it works. We don't try to change stuff too fast. When we took over SPI Cinemas in Chennai, we knew that they have a strong presence in the region. So, we didn’t change the branding. But in other markets like Mumbai and Bengaluru, we may eventually change the branding since PVR has a stronger presence there.
You are also looking at expanding overseas. What all can we expect in 2019?
The focus for this year is going to be our market abroad. We are looking at Saudi Arabia since it’s a newly opened market for us. We are looking at Colombo in a big way with a nine-screen multiplex expected to open in the first half of the new financial year. Sri Lanka lacks big multiplexes. That’s why it was an obvious choice for us. We are not looking at places too far from India. We are also working with Dubai-based Al-Futtaim group for a joint venture to enter into Dubai. A strong presence of Indian diaspora there was a big factor. So, this year we’ll focus on our overseas expansion in a big way.
