Cineline India - Picture abhi baaki hai

Mcap: 396Cr, CMP: 122
FY2023: Revenue - 145Cr, PAT - 2Cr

• It operated close to 130 screens mostly in Western India. In 2012, Cineline sold their entire operations to PVR for 395Cr, making PVR the largest multiplex player in India. Part of the deal also included a lease agreement for 23 screens for a period of 10 years.
• The sale had a non compete clause, barring Cinemax to enter into similar business for 10 years

April 2022
• Term of the non compete clause had come to an end and Cineline decided to venture back into the business of Cinemas. As an initial step, it started with the 23 screens with a seating capacity of around 6000 under the name of MOVIEMAX that was leased out to PVR 10 years back
• It monetised Non core assets for a value of roughly 80Cr including a Eternity Mall in Nagpur (60Cr) and couple of commercial spaces in Mumbai (20Cr)
• It also operates Hyatt Centric Hotel in Candolim, Goa with 160+ rooms contributing to roughly 20-25% of revenues

Operations as of date:
• 4th largest cinema chain in India in terms of box office collections
• Operates 39 cinemas (Currently operational: 18 and Under fit out and tied up: 21)
• 158 Screens (Currently operational: 64 and Under fit out and tied up: 94)
• Seating capacity of 36,000+ across 26 cities


Key triggers:

Strong promoter pedigree:
• Mr Rasesh Kanakia was one of the earliest entrants into the multiplex business. Created a brand – Cinemax with 130+ screens
• The promoters are also engaged in the business of real estate having developed commercial and residential projects across Mumbai (LinkLink)
• Promoters have infused money a couple of times since making a re-entry in the film exhibition business. In 2021, did a preferential allotment to promoters at INR 71.5 to raise for further expansion and further issued warrants at INR 130 per share, a part of which recently got converted in October 2023 taking their stake to almost 68%

Expansion plans:
• Managed to open 61 screens and garner 35 lakhs+ admits within an year of coming into business
• Following a low capex expansion plan with acquiring developers’ fully fitted, plug and play screens and entering into a revenue share model for majority of tied up properties
• Undertaken renovation of existing screens
• Roll out plan till March 2025

Debt reduction by way of sale of non core assets:
• Currently has debt of 380Cr+ including lease liabilities of around 110Cr+
• Looking to monetise Hyatt Centric Hotel in Goa with is valued at roughly 300-350Cr

Recent performance (1H FY24)
• Recorded revenue of 104Cr from Cinema business, up 180% from 1HFY23 with total admits for 1HFY24 crossing 35 lakhs+
• Average Ticket Price (ATP) at INR 234, up 38% YoY with Spend Per Head (SPH) at INR 85, up 31% YoY
• Hospitality business also clocked 11Cr+ in revenue with an occupancy rate of 83% for 1HFY24
• Reported operating margin at 30% and turned profitable in Q2 FY24

Peer comparison as of 2QFY24


• PVR currently trades at a market cap of 17,000Cr. Cineline currently trades at a market cap of 400Cr
• Cineline being roughly 1/10th in size in terms of no of cinemas, screens and seating capacity would be valued at roughly 1600Cr. Discounting this further for premium ATP+SPH for PVR with a better brand image, the valuation for Cineline should be much more than it is today. Plus when the screens under fit outs come on stream, the revenues could easily double (90+ screens under fit outs) from current levels

Key risk:

High interest cost
• Given the company is in a phase of expansion with around 380Cr of debt (including 110Cr+ of lease liabilities), the interest burden is currently eating up on the margins. Going forward, if the sale of the non core asset (Hotel in Goa) gets delayed, bottomline would be stretched

Disclosure: Invested around levels of 120-122


Have been following the company for a year now

Two issues that have to be looked upon

  1. Monetization: If you look at the investor presentation for the past 2-3 quarters there is a slide that is missing

    It was a major part of my thesis, bottomline will keep on suffering due to delay in monetization of this.

  2. Growth: This year they added only 1 property and 3 screen as compared to 17 and 61, again if the monetization happens the expansion can happen at much faster pace.
    Growth was majority driven by box-office number than expansion

Disclosure: Invested


Thanks @Aditya_Chugh for initiating this thread.
Looks generally undervalued comparatively.
But the question is , is it warranted considering its history, size, and also the trajectory of Multiplex screens industry? their growth projections makes it worth exploring.
I have couple of quick questions,
what does it mean by fully fitout and tied up? does it mean they are just acquiring some existing local screens that are operated by small players?
And they(management) keep emphasizing low capex model, what does it mean ? how does their Rs2.5cr per screen compare to others, is it an additional spending after acquiring fitout and tiedup?
Is ATP of Rs270 per show (I assume there can be 4-5 shows per screen as per PVR reprt) or per seat /day?
Is it possible to get the break up of avg cost towards producer/distributer per ticket? whats the cost per ticket towards entertainment taxes and other regulatory charges?
Unfortunately this industry is capital intensive and has low returns.

Was able to speak to a gentleman who works in Multiscreen exhibition.
per him, “fully fitout and tied up” means its mostly plug and play excluding equipment , some movable furniture for food and beverage. he mentioned Rs2.5cr is an estimated total capital needed per screen including everything (quote “starting from 4 bare walled structure”), so the commentary from the management that its model is based on “fully fitout and tied up” and spend Rs2.5 cr per screen on top of it not consistent with competitors. He thought, "from here bringing up another 150 screens in another 1,5 years in a profitable manner, seems like stretched "
He being from the industry doubted if they have 160 screens already operating, he suggested to do a bit of research to confirm screens they have disclosed as operating, also suggestion was to speak to the owners of the properties if the rents were paid as agreed and on time.
The general caution was , when there is a large player, (PVR_INOX), distributors will have pressure from large player not to release on screens of smaller player. He said it can be big risk.


They have 64 operating screens not 160 as of end of Q2

@RocketMan you are right. I have seen it in their presentations. But they also claim their current screen strength is 156, see from pic.

But notes underneath say they are under fit out and tied up, likely , they have some agreement in place for the rest. In that case, its not appropriate to use that no for valuating and peer comparison.
Is management’s claim that they are no 4 in multiscreen exhibition (with 62 screens as of date) accurate?

Nevertheless I did some quick valuation of each screen.

Looking at this, Cineline doesnt seem to be grossly undervalued. However, if they can grow as projected (PVR_Inox has slowed its growth and closing the ones with poor economics), it might create value. But thats the risk considering its history, and trajectory of multiscreen exhibition globally. Any idea what happened after they sold the screens to PVR in 2012? were the proceedings distributed to shareholders?

This is what the management had said in 2012 when they sold…

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There are multiple triggers in Cineline. The number of screens is bound to increase. Promoters have experience running such businesses.
There are not many avenues for entertainment for the weekend. Disposable incomes are rising.
Last but not least there is a lot of social pressure to show how happy you are and post on Instagram and facebook and family WhatsApp groups.

did a detailed analysis on the business, hope this helps:

Business Overview
Rasesh Kanakia, who started as a real estate consultant in 1984 and later ventured into real estate development, founded the company in 2002. He
initially made a significant impact in the early 2000s with his venture into the movie exhibition industry, operating a successful chain of multiplexes
named “Cinemax.” Predominantly established in Mumbai and nearby regions, this chain was one of the early entrants in the multiplex market.
However, in 2012, Rasesh sold Cinemax to PVR and took a hiatus from the movie business, re-entering in 2022 with the launch of the “MovieMax”
chain of theatres on April 1st, 2022, after the conclusion of a non-compete agreement.
As of September 2023, MovieMax Cinemas has rapidly grown to become the fourth largest cinema chain in India, boasting 39 operating cinemas
across 26 cities and 158 screens. The company also owns two windmills in Viswada (Gujarat) and Revangaon (Maharashtra), with capacities of 0.60
MWA and 1.60 MWA, respectively, selling the generated power to the state government.
Previously, the company’s primary income was from rentals of commercial spaces in entertainment, commercial, and retail sectors. Now, it’s shifting
focus to become an asset-light entity, concentrating on growing its cinema exhibition business. This strategy includes monetizing non-core assets to
raise 350-400 Cr, which will be reinvested in the movie business. This includes the recent sale of commercial spaces in Mumbai and Eternity Mall in
Nagpur. (a) Commercial Spaces in Mumbai (2 offices in Kanakia Boomerang) has been sold for Rs. 21 Cr b) Eternity Mall, Nagpur surrounded by the
Sitabuldi Retail Market has been sold off for Rs. 60 Crores.)
Moving forward, the company is focusing solely on its cinema business, aiming to enhance consumer experiences through the MovieMax chain. The
target is to reach over 70 cinemas, 300 screens, and 70,000 seats across more than 35 Indian cities by March 2025. The expected capital expenditure
per screen is estimated at 2.2 - 2.5 Cr, with a combined Average Ticket Price (ATP) and Spend Per Head (SPH) of Rs 250-280 per customer.

Business Metrics & Valuation
This financial and operational analysis of the cinema business reveals several key insights:
Revenue Growth: The company achieved a significant increase in turnover, reaching approximately Rs. 102 Crore in H1 FY24, up from Rs. 36 Crore in
H1 FY23. This growth is driven by both net box office collections (approximately Rs. 67 Crores) and food & beverage collections (around Rs. 28 Crores).
EBITDA Improvement: The EBITDA has improved markedly to about Rs. 28 Crore in H1 FY24 from Rs. 8.6 Crores in H1 FY23. This suggests an
enhancement in operational efficiency and profitability.
Expansion in Screen Count: The increase in the number of screens from 118 to 158 and cinemas from 30 to 39 within a year indicates aggressive
expansion, which is a positive sign for growth potential.
Valuation and Sales Projection: The business is currently valued at approximately 1X Sales for 2024-25. With plans to add another 150 screens in the
next 1-2 years, there’s an anticipation of a significant sales increase, potentially doubling the current Annual Recurring Revenue (ARR).
Impact of Expansion on Current Financials: The current negative EPS (Earnings Per Share) and cash flow can be attributed to ongoing investments in
expansion and new locations. This is a common scenario for businesses in a growth phase.
Management’s Strategic Approach: The management’s focus on growth, backed by a thorough analysis of future profitability for each new location,
suggests a strategic approach to expansion. This indicates a balance between aggressive growth and calculated risk-taking.
Small Base Effect and Future Growth: The concept of the ‘small base effect’ implies that the business is starting from a relatively low base, which can
result in disproportionately high growth percentages as it expands.

Competitive Analysis
The company is quickly rising as a prominent player in the movie cinema chain sector, ranking fourth in India behind PVR Inox (~1600 screens),
Cinepolis (~600 screens), and Carnival Cinemas (~450 screens). Chairman Mr. Rasesh is actively pursuing an aggressive growth strategy with the aim
to elevate the company to the second-largest position in the national market. As the company continues its expansion, it is expected to benefit from
operating leverage, which will contribute to cost savings and a reduction in operational expenses.

Metrics (H1 FY 24) PVR INOX /MovieMax
No. of Screens 1,569 /158
No. of Cinemas 340 /39
No. of Seats 3,40,000 /36,000
No. of Cities 115 (India and Sri Lanka) /26 (India)
Occupancy % 26.1% /~30%
Admits (No. of people) 8.2 Crores /35 Lakhs
Total IncomeH1 2023-24 Rs. 3344 Crores /Rs. 103 Crores
EBITDA Margin 33% /27.4%
PAT Margin ~2.5% /~0.1%
ATP (Average Ticket Price) Rs. 264 /Rs. 222
SPH (Spending Per Head) Rs. 134 /Rs. 83

Investment Narrative/Thesis
India’s screen count dwindled in the pandemic and currently there are 8,000 screens in the country compared to China’s nearly 80,000. The Indian
film exhibition space remains largely underserved with >6,000 screens being single screens waiting to be converted into multiplexes and can
accommodate more multiplex screens especially in Tier 2 and Tier 3 cities. As far as screen density goes, India lags miles behind countries like the US,
Canada, and China with six screens per million of population. In comparison, China has 30 screens per million of population while US has 125 screens.
Adding to it, the language barriers in India’s film industry have started to blur and dubbed south Indian movies are making inroads into the Hindispeaking markets and vice-versa.
In India, cinema is not just entertainment; it’s a vital part of the culture, a source of escapism or a family coming together event. Movies in various
languages cater to a diverse and large population, creating a constant demand for film content. With India recently achieving $4 Trillion of GDP on
the back of the growing consumption story and a growing youth population, who are generally more inclined towards entertainment and leisure
activities, including movie-going. As urbanization increases, the lifestyle of people changes, leading to more leisure time and a tendency to seek out
entertainment options like movies. The ease of online ticketing and the effectiveness of digital marketing campaigns have made it easier for audiences
to access and choose cinema offerings. The introduction of advanced screening technologies like IMAX, 4DX, and 3D has enhanced the movie-watching
experience, attracting a larger audience to cinemas.
Regional Focus and Market Dynamics: The company is notably emphasizing expansion in South India, where approximately 70% of India’s moviegoers
are located. This region, especially Tamil Nadu, followed by Telangana, Andhra Pradesh, Kerala, and Karnataka, is identified for its higher occupancy
Seat Count and Market Share Goals: With cinemas averaging over 600 seats, the aim is to establish more than 200 screens in South India. The longterm goal is to capture a 50% market share of cinemas in this region, which is expected to contribute to reduced operating expenses and improved
screen occupancy rates.
Strategic Location Selection: Leveraging their background in real estate and multiplex operation, the promoters conduct in-depth analyses to identify
profitable locations. An occupancy clause is included in the lease agreements, a strategy not adopted by PVR, providing downside protection. The
average lease term is noted to be 19 years.
Quality and Service Differentiation: The insider highlighted the superior food quality offered, including live counters, a feature not supported by PVR
in South India.
Competitive Landscape Awareness: The largest player, PVR INOX, has a widespread presence across Indian cities. In contrast, Cinepolis is focusing on
expansion in metro cities only. The third-largest chain is currently facing financial struggles, being declared an NPA by its biggest lender
Business Strategy
Expansion Strategy and Market Analysis: The company’s expansion is strategically focused on locations that promise profitability rather than just
expanding for the sake of increasing numbers. This approach is underpinned by an understanding of the South Indian demographic and the lack of
quality cinema experiences in Tier 2 and Tier 3 cities.
Financial Model and Investment Strategy: The business operates on a revenue share model with mall or property owners. For instance, initial
investments of 3-3.5 crores are proportionally shared between the company and the property/mall owner. This model is particularly favored in
locations with a higher probability of lower occupancy rates.
Cost Management and Investment Efficiency: The use of a revenue share model significantly reduces the initial cost per screen, with a reduction of
at least one-third expected. The strategy also includes a refurbishing timeline of 6-7 years for each project.
Leadership Approach: The Chairman’s leadership style is described as pragmatic and grounded, focusing on sustainable expansion that prioritizes
profitability and efficient location targeting.
Revenue Share Model and Property Acquisition: The company has predominantly tied up its properties under a revenue share model. This approach
is not only cost-effective but also mitigates financial risks associated with fluctuating occupancy rates.
Acquisition of Standalone Multiplexes: A key part of the strategy involves acquiring standalone multiplexes that have struggled to resume operations
post-pandemic. This move is indicative of opportunistic growth, capitalizing on the market changes brought about by the COVID-19 pandemic. By
taking over these multiplexes, the company can expand its footprint and market share, particularly in locations that may already have established
infrastructure but lack the operational bandwidth to restart independently.

Key Risks
Shift to OTT: OTT platforms offer a wide variety of content, including movies, TV series, documentaries, and more, all accessible from the comfort of
one’s home. This shift might lead to less and less people visiting and spending money watching movies in the cinemas
Revenue Share Model Vulnerabilities: While the revenue share model reduces initial investment, it also ties the company’s fortunes closely with
those of property owners. Changes in the terms of these agreements, or financial difficulties faced by property owners, could impact the company’s
revenues and operational stability.
Operational Risks in Acquiring Standalone Multiplexes: Taking over standalone multiplexes that failed to restart post-pandemic involves inheriting
any existing operational challenges.
Lease Agreements with Occupancy Clauses: While the occupancy clause in lease agreements provides downside protection, it could also limit
flexibility. The company may be obligated to maintain operations in less profitable locations due to long-term lease commitments.
Promoter Background
Mr. Rasesh, serving as the Chairman, collaborates closely with his brother, Himanshu Kanakia, who holds the position of Managing Director. Himanshu
brings a unique blend of engineering talent and innovative skills in project development and the film exhibition industry, contributing his expertise to
the expansion and construction of new venues. Additionally, Mr. Rasesh’s son, Ashish, has joined the business as the CEO of the movie exhibition
sector. Despite being relatively new to the industry, Ashish is dedicated to realizing the vision set forth by Mr. Rasesh. The management’s previous
experience in both the cinema business and real estate development indicates that they possess the appropriate skills for re-entering the industry.
This background instills confidence in their ability to meet the outlined expansion targets. Their approach, characterized by cost efficiency and strategic
planning, further supports the likelihood of successful expansion.

The company appears to be in a strong growth phase, reflected in its rapidly increasing turnover and EBITDA, along with aggressive screen and cinema
expansion. The valuation at 1X Sales for 2024-25, suggests that the stock may be undervalued, offering potential for significant growth as the business
scales and stabilizes. The management’s focused and analytical approach to expansion supports a positive outlook for the company’s future

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Here is the video with more details than the previous one that @Karan_Khanna had posted. Thanks, @Karan_Khanna for posting the previous one.

Looks like a decent result. Overall turn around is on the way—2 quarters now of continuous profit. The hotel business is steady and the movie business is becoming bigger. QoQ will vary some what depending on releases.


Any views from anyone on the recent underperformance of stock?

Though I am invested, the stock looks fully priced to me at current levels. Thinking of selling it. Looking for counter views here, please.


  1. PVR’s market cap/ operating margin ratio is 7.5 (1796 TTM profit, 13505 Mcap). Cineline’s annual operating profit from movie should be ~40 Cr → Valuation should be 300 Cr only for movie + 100 Cr for hotel one at most

  2. Growth promised is not visible in terms of number of screens. In FY22 March investor presentation, the company outlook was to get to 300 screens by FY25. We might close this year with 160-170 screens. 300 looks far-fetched by next year. Operational screens have increased from 23 to 64 in two years; Looks slow.

  3. The only positive I can see is ATP + SPH numbers being good. They have achieved FY25 target before time.

Would be great to hear counter opinions. What is the bull story here?

Hotel sale is main trigger. After that money comes in their financial position will be good to expand with more screens.

Recommended and invested since 117

IMO, Cineline is on a path, people expecting quick returns will be disappointed. Each quarter you will see them adding a few more screens. Each screen addition will add to an additional top line and new screen additions are funded now by revenue and profit from previous screens. The cycle has started. The only catch is that good(Sorry saleable) content needs to keep hitting the cinemas.

Yep, I bought it at slightly higher level I guess. Would have to wait on it. Have added some more during the price fall.

The story looks promising with an experienced promoter.

Every quarter, they are paying 10 Cr on interest cost, which is equivalent to 2 screens (5 Cr capex on each screen). If the company reduces debt after hotel sale, they should be opening 10 more screens in an year (at max).

Looking at PVR’s past acquisitions, each sceeen gets a valuation of 7-10 Cr. So each year, additional 70-100 Cr value unlock will be there post debt repayment.

However, growth is difficult in such a Capex heavy business without additional debt or equity dilution. Even with assumption of 5 Cr profit every quarter, the RoE of company will be 12.5% (book value - 160 Cr)

Given RoE is lesser than growth, looks difficult to sustain growth with profits only. However, RoE should expand slowly with each screen increase. Have to patiently wait, till RoE becomes 20% or more.

I have tracking position in cineline since long, could not able to increase it because of serious competiion by new age small theaters.

Those have capacity of 50-100 seats, PVR like interior and extermly good sound and picture quality. The main thing is they are in close proximity.

If I check bookmyshow in ahmedabad it shows 52 movie theater, names like Apple, connplex, Banana, white, NY etc. Not sure but it may be less than 20 few years ago.

Earlier I used to travel 7-8 kms for PVR but recently connplex opened near my home and my visit to PVR reduced drastically, as I get same experience of PVR nr to my home.

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Cineline yesterday added 4 new screens

This seems to be in an upcoming area near Mohali. Can anyone local to Mohali or Chandigarh verify this?

Available on Bookmyshow. Don’t worry.
This is genuine company, but needs to grow faster


Has management given any commentary on slow screen growth this year?
They had added 60+ screens in FY23. They have added less than 10 screens in FY24. Each screen contributes to 8-10 Cr valuation.

Investor value creation only happens through screen addition in movie business. You can play with 10-20% with ATP + SPH increase. For multibagger returns, they need to add 30-40 screens every year.

I see only 2 possibilities - Sell hotel/ Dilute equity and bring growth money.

They already have high debt(considering the promoters have other real estate businesses, and might be leveraged to large extent on that side, I would consider existing or future debt for the listed company as much riskier), if they can sell the Goa hotel to execute planned screen growth, i think it can play out. From the numbers in last 2-3 quarters, I can see they have unit economics in place already. As long as they get rid of debt and by better capital allocation , I think this probably will do well.