Inox Leisure- A faster running horse?

Can someone help me understand why Screener is reporting a very high interest expense of 221 cr in FY2020? I do not see any new borrowings by the company.

Hi @eyesice

This is mainly because of the transition to the Ind AS 116


Company liquidated all its holding in INOX leisure through its trust entity. In the process, 101.36 cr. was raised which will aid liquidity for the company.

The liquidation is actually surprising considering that the ceo did not indicate any active consideration of this means during the investor call. This ws one of the possible ways but the management were looking at raising only 30-40 crores in addition to the existing cash balance.
This caught me in surprise

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It won’t be easy to get the crowd back unless there is a block buster release

Another bad quarter for INOX, result summary is below

Here are the detailed business metrics over the last 12 years. One silver lining is spend per head deteriorated marginally in FY21 (77 vs 80 in FY20). Average ticket prices went down from 200 in FY20 to 170 in FY21.

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY15-20 Incr
Screen count 91.00 119.00 239.00 257.00 279.00 310.00 377.00 420.00 476.00 492.00 574.00 626.00 648.00 10.67%
Properties 26.00 32.00 63.00 68.00 72.00 79.00 97.00 107.00 119.00 123.00 139.00 147.00 153.00 8.67%
Number of seats 99’429.00 109’406.00 119’395.00 121’573.00 135’586.00 144’467.00 147’436.00 7.76%
Average occupancy 25% 28% 28% 25% 29% 28% 26% 28% 28% 8% 2.29%
Average ticket price 156.00 160.00 156.00 164.00 170.00 178.00 193.00 197.00 200.00 170.00 4.05%
Footfalls (cr.) 3.90 4.30 5.34 5.37 5.33 6.25 6.60 0.38 8.95%
Net box office collections (cr.) 490.50 551.60 712.80 748.10 802.20 975.00 1’105.00 54.00 14.91%
Food and beverages (cr.) 141.76 162.30 191.00 265.60 284.10 306.00 436.00 497.00 28.00 21.08%
Advertising (cr.) 32.44 49.50 81.50 91.00 96.20 138.90 177.00 179.00 3.00 17.04%
Others (cr.) 60.40 71.20 91.10 92.30 101.00 104.00 134.00 63.00 13.48%
Spends per head (Rs.) 41.00 44.00 47.00 49.00 55.00 58.00 62.00 66.00 74.00 80.00 77.00 7.78%

Disclosure: Invested (position size here)


This could be amazing if it happens. No crash crunch, will help establish boundary between OTT and multiplexes.

Inox clarified that there was no such discussion between inox and amazon.

barring another severe covid wave(s), the cinema business seems to be on track to normalcy. It seems the current market price already has priced in the same.
I feel the next opportunity to create alpha in this space will come from the non movie exhibition revenue opportunities - F&B, gaming etc; The bid to establish movie theatres as something more than just a movie watching destination.

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The merger has been confirmed By Inox now.

• Share Exchange Ratio of 3 shares of PVR for 10 shares of INOX

Share swap ratio is offering a 15% arbitrage opportunity for Inox shareholders at CMP.

I believe that’s a minimum premium that Inox deserves due to the better quality of balance sheet and minimal debt.

As an Inox shareholder, I was kind of hopeful that Inox could get premium multiples over PVR in the next couple of years with strong expected demand post the Pandemic and great balance sheet strength.

Overall, I think it’s a decent outcome for Inox shareholders as PVR is undoubtedly the no.1 cinema brand and the share swap is also giving the additional arbitrage due to Inox’s balance sheet strength.

The amalgamation is subject to the approval of the shareholders of PVR and INOX respectively, stock exchanges, SEBI, and such other regulatory approvals as may be required.

I wonder whether CCI would approve the merger as the merged entity will be a clear leader with 1527 screens compared to Cinepolis with 400 screens.

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From CNBC interview with Ajay Bijli:

  • Plan to double the combined screen count in 5 to 7 years.
  • Approx capex will be 4000 cr.
  • Their counsels have advised CCI approval is not required. Also, there has been no notification yet from CCI. And the current screen count in india is 9500+ and PVR+Inox screen count is 1500.
  • SEBI, NCLT, Shareholders approval will take 6 to 9 months.
  • There is a strong momentum with release of movies like Kashmir files, RRR

reference: Ajay Bijli Of PVR & Siddharth Jain Of Inox Leisure Speaks On The Merger Of PVR & Inox | CNBC TV18 - YouTube


Prabhudas Lilladher believes PVR and Inox merger is a win-win situation as it would lend invincible size advantage to the combined entity (pre-COVID screen/BO market share of ~46%/30% respectively) and result in material revenue & cost synergies by improving bargaining power with film distributors, real estate developers, ad-networks and ticket aggregators. Merger will relegate competition to backyard (Carnival & Cinepolis have ~400 screens each) and would further strengthen the size advantage as combined entity plans to add ~200 screens each year.

The merged entity will operate as PVR-Inox however, existing screens will continue under their respective brand names.

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I have query on GFL Ltd(Holding company of Inox ~ 43%)
Is it possible that GFL gets dissolve and holders gets PVR shares after completion of merger or INOX shares before merger

Experiance investors please share your views, knowledge and experience on this type of situations


It will depend on how GFL dissolves. It can all the shares first and then return the cash to the shareholders.

Assuming that you are talking about the case where somehow the shareholders of GFL gets Inox’s equity. Pls do explain how this happens.

If the merger happens before Inox & PVR merger then the shareholders will get Inox shares.

When Inox & PVR merge then the GFL will hold PVR shares just like any other Inox holder.

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Satisfactory results by Inox.

  • Revenus at 589 this quarter vs 496 in Q1FY20.

  • OPM is 36% vs 30% Q1FY20. Largely due to lower employee cost. Employee cost is 20% lower than pre covid levels.

  • F&B revenue share is back to pre covid level.

  • Advertisement revenue did not. Advertisement share in revenue was 5% this quarter vs 9% in Q1FY20.
    This should IMO increase as advertisers realise that the footfall is back to pre covid levels. This should further increase the OPM.

Anyone who has done valuations for Inox?

investor presentation:

disc: invested


Could some one please explain why there is Exceptional items of (-2438 Lakhs),
I understand it is for the expenses incurred in connection with the amalgamation with PVR,

But Why this much!!!