Indian Multiplex Market: The Growth of Inox Leisure - sersc
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International Journal of Grid and Distributed Computing
Vol. 13, No. 1s, (2020), pp. 298-308
Indian Multiplex Market: The Growth of Inox Leisure.
Mr. Monojit Dutta1, Ms. Sayani Sen2
1
Assistant Professor, Department of Commerce and Management, St Xavier’s University
Kolkata, India
Email id: monojitdutta68@gmail.com
2
Independent Researcher, Kolkata, India, Email id: sayanisen97@gmail.com
Abstract: Cinemas have always been an integral part of people’s life. As our society has progressed
so has the cinema industry. Similarly, the medium of watching movies has also change with the
introduction of new technologies. During the 70s and the 80s, there were mainly single screen movie
theatres where people had to stand in long queue to buy tickets, whereas, now there are movie
multiplexes, where it is no longer necessary to stand in queue to get a ticket, it can be done easily
from the comforts of home through online tickets booking apps. In this paper, we have discussed
about the different multiplexes in the Indian market, mainly emphasizing on the two main players of
this industry i.e. PVR Ltd and INOX Leisure Limited. The paper mainly aims at showing how INOX
inspite of not being in the market for as long as PVR is still giving PVR a tough competition on
various aspects. It was rightly found that PVR Ltd holds the maximum share in the market but the
growth of Inox Leisure Ltd is impeccable and in certain area; Inox outperforms PVR in terms of
return on share, ticket prices and revenue.
Keywords: Cinema, Inox Leisure, Multiplex, PVR Ltd.
INTRODUCTION
India is a country of cinemas. It produces almost more than 2000 movies each year in various
languages. Indian cinema is a global enterprise. However, currently it is going through an evolution
where the movie industry is shifting from the single screen movie theatres to multiplex. Research has
shown that from the 1970s cinemas were no longer attracting proper audience. The darkness of the
movie theatres were becoming the perfect place for the gangs of young people for continuing there
shady activities. Hence the movie halls were not seeing much of families or women as audience who
are considered as a crucial part for maintaining cinema’s social legitimacy. During the 1980s the
general middle class people were not at all seen in the theatres they preferred only those halls which
were within their colonies. This downshifting trend of the movie industry which continued for almost
two decades had led to the appearance of multiplex, which could provide a suitable environment for
theatrical experience of the middle class people.
The arrival of multiplex changed the way of watching movies. Now it has better sound, picture
quality, seating arrangement, availability of good snacks and beverages, also the convenience of
shopping in case of shopping mall multiplexes. Blooming of multiplex started during the 1990s in
India. PVR was the first multiplex chain of India. Currently cinema chains like INOX, Carnival
Cinemas, PVR, SPI Cinemas, Cinepolis and Big Cinemas are operating across the country. Mayajaal
in Chennai is the largest multiplex in India with 16 screen megaplex and PVR is the largest multiplex
chain in India.
PVR CINEMAS
PVR Ltd. was incorporated on 26th April 1995. It was a partnership between Priya Exhibitors Ltd.
which was a local family-run exhibition concern and Village Roadshow Ltd. which was a
multinational concern based in Australia. The company launched its first movie multiplex in the Saket
district of New Delhi in 1997. For their first site which was called the PVR Anupam, they remodeled
a large old theatre into a multi-screen site and built it as per the international standards of a multiplex
facility. They started the computerized box office operations by selling computerized tickets.
In 2002 Village Roadshow Ltd. made a disinvestment and sold their entire shareholding to Priya
Exhibitors Ltd. So, the company changed their name from Priya Village Roadshow Ltd. to PVR Ltd.
with effect from 28th June 2002. In March 2003 ICICI Venture Funds Management Company Ltd.
made an investment of 380 million rupees in the company and acquired 38.45% stake by way of
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Copyright ⓒ 2020 SERSCInternational Journal of Grid and Distributed Computing
Vol. 13, No. 1s, (2020), pp. 298-308
purchasing equity shares. In 2005 PVR Pictures Ltd. became a 100% subsidiary of the company and
during the same year they made an IPO of 7700000 equity shares comprising a fresh issue of 5700000
equity shares by the company and an offer of sale for 2000000 equity shares by the Western India
Trustee and Executor Company Ltd. On 4th January 2006 the company’s shares were listed on NSE
and BSE.
Not only movies PVR is also involved in setting up and running of bowling alleys, karaoke centres,
ice skating rings and managing and operating restaurants, pubs, coffee shops etc. across India by
setting up joint ventures with other companies. As on 31st March 2018 the company has three
subsidiaries – PVR Pictures Ltd., PVR Lanka Ltd. and Zea Maize Private Limited. As of now PVR
Ltd. is the largest and premium multiplex cinema exhibition company engaged in the business of
movie exhibition, distribution and production which earns revenue from in-house advertisement, sale
of food and beverage, gaming and restaurant business.
INOX Leisure Ltd.
INOX Leisure Ltd. was first incorporated as a public limited company in November 1999. It is a
subsidiary of Gujarat Fluorochemicals Ltd. The company is diversified across industrial gases,
engineering plastics, chemicals, renewable energy and the entertainment sector. The company is
engaged in operating and managing of multiplexes and movie theatres across India. In 2002 the
company commenced their operation by opening their first four screen multiplex at Pune and another
four screen multiplex at Vadodara during the same year. in 2004 they commenced their operation in
Kolkata, Goa and Mumbai. Gradually they also started operating in various other places of India like
Bangalore, Jaipur, Indore, Darjeeling, Kota, Lucknow etc. over the period of years.
At present INOX Leisure Ltd. is the second largest multiplex chain of India with 147 multiplexes and
626 screens in 68 cities of the country as of March 2020. INOX properties are known for their
uniqueness with their own distinct architecture and aesthetics. Currently it is the only multiples
operator with such a diverse PAN India presence.
Carnival Cinemas
Carnival Cinemas is under the parent company Carnival Group which was founded by Dr. Shrikant
Bhasi in 2010. Carnival Films Pvt. Ltd. operates this cinema chain. They first started operating within
the southern states of India. They launched their first movie screen in Kerala. Gradually they have
expanded their business and now they operate in various states like West Bengal, Maharashtra,
Madhya Pradesh, Uttar Pradesh along with some other southern states like Karnataka, Tamil Nadu
etc. Currently they have approximately 470 cinema screens across pan India. In 2016, Carnival
Cinemas Ltd. acquired Big Cinemas which was under Reliance MediaWorks Ltd. led by Anil
Ambani. Carnival has already established itself in movie production, exhibition and distribution along
with food courts, events, IT parks etc.
Cinepolis India
Cinepolis was founded in Mexico in 1971 and Cinepolis India is a wholly owned subsidiary of
Cinepolis. Cinepolis India launched its first movie screen in Amritsar in 2009. It is the first
international movie exhibitor of India. In 2014, they acquired Fun Cinemas, which was owned by
Shubhash Chandra’s Essel Group. Currently the company has approximately 383 movie screens
across pan India which operates under the brand names of Cinepolis, Cinepolis VIP and Fun Cinemas.
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Vol. 13, No. 1s, (2020), pp. 298-308
NUMBER OF CINEMA SCREENS
Cinepolis India 383
Carnival Cinemas 470
INOX Leisure 612
PVR Cinemas 846
0 100 200 300 400 500 600 700 800 900
Source: Annual Report
Graph 1: Number of movie screens of major multiplex players across India till March 2020
REVIEW OF LITERATURE:
Withey (1971) in this paper has stated that Asian theatre has never gotten much attention from
scholarly point of view. Though some of the most talented people of this industry has come up from
the Asian theatres, even the West has also adopted many of its innovative production techniques,
make up styles and gestures, Asian theatre was neglected. The paper has given special emphasis on
the works of the Indians in the field of classical drama and theatre. It has also talked about different
forms of drama and folk theatre.
Richmond (1973)in his paper has focused on how theater plays a political role in India. It has
depicted that while theatre was used as a mode to reach the wider audience during the ancient period
to spread the teachings of religions, gradually that purposehas evolved. During the pre-independence
period many dramas were staged only with the purpose of making people aware of how the British
were misusing their power. Over the period of time theatre has become a weapon to deal with the
social evils. Many a times in history many political parties have used theatre to deliver their message
to the public.
Maejima et.al (2008) in their paper has discussed about a very new concept i.e. the Future Cast
System. This system allows the visitors to be present as a cast member in a pre-recorded movie along
with its all other cast members. This is done with the help of 3G technologies. This system was first
exhibited at the 2005 World Exposition held at Mitsui – Toshiba pavilion in Aichi Japan.
Thakur(2013) in this paper focuses on how theatre helps in developing communication. It deals with
the history and origin of theatre at international as well as national level and also describes how
theatre played a role in awakening people’s awareness against the exploitations of the British. The
author has also focused on the leftist ideology followed in theatres and the anti-fascist theatrical
movement. The paper also depicts how theatre plays a crucial role in creating public awareness
related to various social issues. Theatre has also been used many times in history as mode of protest.
Park and Ham (2015)in their paper has discussed about how the shape and architecture of a movie
hall has a significant effect on the customer satisfaction and hence helps in their profitgeneration. The
paper says that there is no particular definition of multiplex. Different countries have different concept
of multiplex. The paper mainly deals with the different structures of multiplex and about their space
management techniques.
Ratanasawadwat (2016) in this paper has talked about how the Thailand movie theatre is now
moving from offline to online ticket booking system. They are expanding their market via online
methods like websites and mobile applications. The author has conducted a primary survey and has
come up with some suggestions on how the multiplexes can improve customer satisfaction and can
strengthen their customer loyalty. The survey was developed on some theoretical grounds like
ISSN: 2005-4262 IJGDC 300
Copyright ⓒ 2020 SERSCInternational Journal of Grid and Distributed Computing
Vol. 13, No. 1s, (2020), pp. 298-308
Technology Acceptance Model (TAM), e-SERVQUAL and the Kano’s Model of Customer
Satisfaction were applied.
Ross (2017) in her article has taken up the mobile theatres of Assam and has shown how the
contemporary theatres are surviving and are trying to hold their position while competing with our
traditional film industry. In India where Bollywood and other regional film industry tends to dominate
the market of the middle and upper-middle class people, these theatres are providing entertainment for
the rural people. Not only the source of entertainment but according to the author in our north-east
state of Assam, mobile theatres are more of a social event which are culturally rich and are very
relevant to their traditional village life. It is also helping in making their community stronger.
Akiner and Bykov (2018) for their paper conducted a survey on some Turkish and Russian elderly
moviegoers to study how their taste and preference has gradually changed along with the transition
currently occurring in the movie industry i.e. moving from single screen to multiplex. However, the
study concluded that these elderly persons are more keen on sticking with the single screen movie
halls as they are a part of the memories of their old days. They are emotionally related to these halls.
They don’t even like the usual popcorn and coke which we call the movie snack, as they think that
multiplexes are using them to dominate their culture.
Irfan and Patel (2019) in their paper they conducted a study on the behavior of the consumers
towards Miraj Cinema in the Vadodara city of Indiabased on certain factors set by the researchers. It
was a survey done based on the primary data collected by them. The investigation was mainly focused
on how much Miraj Cinema is recognized in the city and how it is competing with some of the biggest
players on this field like PVR Cinemas, INOX Leisure Ltd. etc. The paper has concluded that with the
magnetic effect of the multiplex, the average movie goers tend to visit multiplexes much more than
the single screens.
Gowri and Sreeya (2019)conducted a survey to study what are the factors that are influencing people
to watch movies in multiplexes than in single screen movie halls. Their study has shown that people
mostly prefer to watch movies in malls rather than drive-ins, multiplex theatre or local theatre. It has
concluded that the malls are most preferred majorly for the convenience of shopping and also due to
the presence of hangout spots and the food courts. They had also tested a hypothesis on whether these
preference changes due to the change in people’s marital status.
Objective:
To study the entertainment sector in India by focusing on the leading players i.e. PVR Ltd.
and INOX Leisure.
To analyze the rise of INOX Leisure in respect to PVR Ltd.
Methodology:
INOX Leisure and PVR Ltd financial performance is analyzed for the financial year 2012-13 to 2018-
19 and 2018-19 (all four quarters) for other aspects like revenue, ticket price and ARPU are collected
from the annual reports of the respective companies. The comparison is not only done on the basis of
the financial performance but also on the other revenue model of these companies. The data has been
presented with the help of simple charts and graphs.
Analysis:
Return on shares on monthly basis:
In the financial year 2019-20(Graph 2) it was found that Inox Leisure Ltd performed better then PVR
Ltd on the basis of month on month return calculated on the closing price of shares, but the opposite
was noticed in financial year 2018-19 depicted in Graph3.
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Vol. 13, No. 1s, (2020), pp. 298-308
FY: 2019-20
0.6
Monthly Return 0.4
0.2
0 PVR
-0.2 INOX
-0.4
-0.6
-0.8
Source: National Stock Exchange
Graph 2: Return on shares on monthly basis
FY 2018-19
0.6
0.4
Monthly Return
0.2
PVR
0
INOX
-0.2
-0.4
-0.6
Source: National Stock Exchange
Graph 3: Return on shares on monthly basis
Source of revenue:
Both PVR and INOX earn their major revenue from movie tickets and food and beverages. Although
advertisements also contribute to a great extent. However, for PVR the percentage of revenue earned
from selling tickets is less than that of INOX as shown in Graph 4 and Graph 5.
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Vol. 13, No. 1s, (2020), pp. 298-308
Revenue Inox FY: 2018-19
Net Box office
10% 7%
Net F & B
26% 57%
Advertisement
Other
Source: Annual Report
Graph 4: Sources of revenue for INOX
Revenue PVR FY: 2018-19
9% Net Box office
12%
52% Net F & B
27%
Advertisement
Other
Source: Annual Report
Graph 5: Sources of revenue for INOX
SPEND AND ARPU:
The spends per head increased for both the company considerably, but the gap between the average
revenue per user i.e. a combination of average ticket price and spends per head reduced between Inox
Leisure Ltd and PVR Ltd financial year 2018-19.
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Spend Per Head
100
Spend Per Head(Rs) 80
60
INOX
40
PVR
20
0
Q1 Q2 Q3 Q4
FY: 2018-19
Source: Annual Report
Graph 6: Spend Per Head
Avg. Revenue Per User
320
310
Avg. Revenue Per User
300
290
280
270 INOX
260 PVR
250
240
230
Q1 Q2 Q3 Q4
FY: 2018-19
Source: Annual Report
Graph 7: Average Revenue Per User
Inox Leisure Ltd outperforms PVR Ltd in F&B:
Food and beverages cover for more than a 25% of the revenue for multiplex operators. It is clear from
Graph that Inox Leisure Ltd has been aggressive in promoting its F&B segment to catch up with PVR.
The F&B growth of both the companies will be aided by increasing footfalls and higher-priced
premium offerings to its customers.
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Vol. 13, No. 1s, (2020), pp. 298-308
Food & Beverage Revenue(Y on Y %)
70
Revenue(Y on Y %)
60
50
40
30 INOX
20
PVR
10
0
Q1 Q2 Q3 Q4
FY: 2018-19
Source: Annual Report
Graph 8: Food and Beverage Revenue
Advertising Income:
PVR Ltd draws more advertising revenue (Graph 9) as compared to Inox Leisure Ltd despite the fact
that Inox is spending hugely in developing the brand Inox Insignia.
Advertising Revenue
120
Revenue (Rs Crore)
100
80
60
INOX
40
20 PVR
0
Q1 Q2 Q3 Q4
FY: 2018-19
Source: Annual Report
Graph 9: Advertising Revenue
Average ticket price of PVR and Inox:
Average ticket price of PVR is always higher than INOX throughout all the quarters of FY 2018-19.
However, during the 3rd and 4th quarters the ticket price was almost same for both PVR and INOX.
Average Ticket Price
220
Ticket Price(Rs)
210
200
190 INOX
180 PVR
170
Q1 Q2 Q3 Q4
FY: 2018-19
Source: Annual Report
Graph 10: Average Ticket Price
Price to earnings multiple from FY 2019-20 to FY 2012-22:
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Vol. 13, No. 1s, (2020), pp. 298-308
Price to earnings ratio is always higher for PVR in comparison to INOX, which is beneficial for the
investors of PVR. Moreover, PVR persists to have a better price to earning multiple not only in the
current financial year but also in the coming years as depicted in Graph 11.
Price to Earning Multiple
40
35
Price to earning
30
25
20
INOX
15
PVR
10
5
0
2019-20 2020-21 2021-22
Financial Year
Source: Annual Report
Graph 10: Average Ticket Price
Revenue of PVR and INOX from FY 2012-13 to FY 2018-19:
PVR Cinemas has always been the major player among the multiplexes in India. However, INOX
Leisure Ltd. is not far behind. Though its revenue did not exceed PVR in any financial years as shown
in the graph but it has always given a tough competition and we can even say that in the Indian
multiplex market INOX holds the 2nd position just after PVR.
Revenue (Rs. in crore)
3500.00
3118.7
3000.00
Revenue (Rs. in crore)
2500.00 2365.45
2181.68
2000.00 1897.09
1707.1
1485.98
1500.00 1358.83 1337.01 1362.58
1229.83
1025.08
1000.00 814.38
798.91 877.78
500.00
0.00
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
PVR Cinemas INOX Leisure Limited
Source: Annual Report
Graph 12: Revenue of PVR Cinemas and INOX Leisure Limited from FY 2012-13 to FY 2018-19
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Vol. 13, No. 1s, (2020), pp. 298-308
Profit before tax of PVR and INOX:
In this case for the first three years PVR Cinemas and INOX Leisure Ltd. has given cut throat
competition to each other in terms of profit, ever INOX earning a greater profit during the FY 2014-
15. However, in the later years the difference in their profit has increased, once again making PVR the
leader in the market.
Profit Before Tax (Rs. in crore)
350
299.03
Profit Before Tax (Rs. in crore)
300
250
194.46 199.1
200
142.48 152.84
150
97.64
100 84.57
52.3152.19 44.63
50 31.9429.36
12.45 16
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
PVR Cinemas INOX Leisure Limited
Source: Annual Report
Graph 13: Profit before tax of PVR Cinemas and INOX Leisure Limited from FY 2012-13 to FY
2018-19
Earnings per share of PVR and INOX:
As usual in this case also PVR Cinemas is earning the most. Apart from the FY 2014-15 when the
amount of earning per share was almost the same for both the companies, PVR has always been able
to hold its position as the highest earner in the market.
Earning Per Share (in Rs.)
45
39.29
Earning Per Share (in Rs.)
40
35
30 26.34 26.68
25 20.18
20
14.95 13.72 14.2
15 12.49
10 8.44
4.85 3.33
5 1.92 3.09 2.18
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
PVR Cinemas INOX Leisure Limited
Source: Annual Report
Graph 14: Earning per share of PVR Cinemas and INOX Leisure Limited from FY 2012-13 to FY
2018-19
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Vol. 13, No. 1s, (2020), pp. 298-308
Conclusion:
After studying the financial and the investing aspects of Inox Leisure Ltd and PVR Ltd it can be
inferred that Inox Leisure Ltd is not too far behind from the No.1 multiplex operator PVR Ltd in
India. There has been a pullback in Inox shares since March 2019; India’s second-largest operator of
cinema screens has returned 33% increase in the last 12 months compared with PVR Ltd 8%.The
growth rate of Inox Leisure Ltd is higher thanthe PVR Ltd. PVR Ltd has superior metrics but Inox Ltd
is quick in taking corrective measure, which is noticed how Inox narrowed the gap in ticket prices and
food and beverages since it is the two largest sources of revenue for multiplex companies. PVR Ltd is
better off to Inox Leisure because of better operating metrics like average ticket price, spend per head
and ARPU. However, as per estimated calculation the valuation of Inox Leisure Ltd is going to
narrow the gap with PVR Ltd due to its expansion plan.
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Maejima, A., Wemler, S., Machida, T., Takebayashi, M., &Morishima, S. (2008). Instant casting
movie theater: the future cast system. IEICE transactions on information and systems, 91(4), 1135-
1148.
Thakur, P. B. (2013). Theatre for development in indian context: An introspection. Global Media
Journal-Indian Edition/ISSN, 2249-5835.
Park, Y. S., & Ham, S. (2016). Spatial analysis of various multiplex cinema types. Frontiers of
Architectural Research, 5(1), 63-73.
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Experience of Turkish and Russian Societies. In Proceedings of The International Conference on
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ISSN: 2005-4262 IJGDC 308
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