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Edited Transcript of PVR.NSE earnings conference call or presentation 17-Oct-19 10:30am GMT

Q2 2020 PVR Ltd Earnings Call

Gurgaon Oct 19, 2019 (Thomson StreetEvents) -- Edited Transcript of PVR Ltd earnings conference call or presentation Thursday, October 17, 2019 at 10:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Ajay Bijli

PVR Limited - Promoter, Founder, Chairman & MD

* Jaykumar Doshi

Kotak Securities (Institutional Equities) - Equity Research Analyst

* Kamal Gianchandani

PVR Limited - Chief of Business Planning & Strategy

* Nitin Sood

PVR Limited - Group CFO

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Conference Call Participants

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* Abneesh Roy

Edelweiss Securities Ltd., Research Division - SVP

* Ankur Periwal

Axis Capital Limited, Research Division - VP of Media and Logistics

* Darpan M. Thakkar

HSBC, Research Division - Analyst

* Jinesh Joshi

Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst

* Karan Taurani

Elara Securities (India) Private Limited, Research Division - VP & Research Analyst for Media

* Keshav Lahoti

Angel Broking Private Limited, Research Division - Analyst

* Rajiv Sharma

SBICAP Securities Ltd., Research Division - Co-Head of Institutional Research

* Swagato Ghosh;Franklin Templeton;Analyst

* Urmil Shah

IDBI Capital Markets & Securities Ltd., Research Division - Assistant VP and IT & Media Analyst

* Vimal Gohil

Union Asset Management Company Private Limited - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, good day and welcome to the PVR Limited Q2 FY '20 Earnings Conference Call hosted by Kotak Securities Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Jaykumar Doshi from Kotak Securities Limited. Thank you, and over to you.

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Jaykumar Doshi, Kotak Securities (Institutional Equities) - Equity Research Analyst [2]

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Thanks, Steven. Good afternoon, everyone. On behalf of Kotak Institutional Equities, I welcome you all to PVR's 2Q FY '20 Earnings Call. We have with us Mr. Ajay Bijli, Chairman and Managing Director; Mr. Gautam Dutta, CEO; Mr. Nitin Sood, CFO; Mr. Kamal Gianchandani, Chief Business and Planning and Strategy Officer and CEO of PVR Pictures; Mr. Rahul Gautam, SVP Finance.

Over to you, Mr. Bijli, and many congratulations for an excellent quarter.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [3]

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Thanks very much, Jay. Good afternoon, everyone. Thanks for joining this call. I'll just give a brief summary of our results.

The consolidated revenues for this quarter ended September 2019 were INR 979 crores as compared to INR 715 crores during the corresponding period last year, witnessing a growth of 37%.

The consolidated EBITDA for the quarter was INR 324 crores as against INR 130 crores in the same period last year, witnessing a growth of 149%. EBITDA margin for the quarter was 33.1%. Consolidated PAT for the quarter was INR 48 crores as compared to INR 35 crores during the corresponding period of last year.

After adjusting for impact of Ind-AS 116, leases, consolidated revenue, EBITDA, EBITDA margin and PAT of the company would have been INR 979 crores, INR 201 crores, the margin would have been 20.5% and INR 66 crores, respectively. This would represent revenue, EBITDA and PAT growth of 37%, 54% and 86%, respectively.

Box office revenues for the quarter were up by 32% from INR 492 crores to INR 374 crores, which is a 25% growth in admits. F&B revenues were up by 38% from INR 270 crores to INR 190 -- from INR 270 crores to INR 195 crores, supported by robust SPH growth of 12%.

Advertising revenues witnessed robust growth of 16%, increasing to INR 94 crores, up from INR 81 crores of last quarter.

During the quarter, Honorable National Company Law Tribunal, NCLT, New Delhi, while it's ordered dated August 23, '19, had approved the scheme of amalgamation from merging SPI Cinemas Private Limited into PVR Limited from the appointed date of August 17, 2018. So during the first 6 months of the current financial year, company has expanded its screen portfolio by adding 42 new screens across 8 properties, and now we operate a network of 800 screens, which is a big milestone for the company, spread over 170 properties in 69 cities across the country, making PVR the first and the only company in India to cross 800 screens milestone in India.

The quarter has also been very successful from operation perspective. The business delivering highest ever footfalls with all other operating parameters, witnessing robust growth. So despite the general economic slowdown in the performance of the business for Q2, the Q2 has been very good, supported by a very good content performance as well. We're excited about the future growth opportunities for screen expansion in India and continue to invest significant capital to expand our screen network and provide innovative movie watching experience to our consumers.

Thanks very much, and over to you, Jay, now.

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Questions and Answers

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Jaykumar Doshi, Kotak Securities (Institutional Equities) - Equity Research Analyst [1]

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Thank you very much. We will now begin the question-and-answer session. (Operator Instructions). The first question is from the line of Abneesh Roy from Edelweiss.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [2]

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Sir, congrats on very good set of performance. My first question is, we are seeing robust performance from you and the other players also in this quarter. So how much of this is because of the general economic slowdown or would you attribute most of this to the strong content? Why I'm asking this is, the slowdown could continue for much more time. So does it mean that the robust performance expectations will continue? This trend is not visible just in India, this is visible globally also that whenever slowdown happens, the box office performance is good.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [3]

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I -- generally, it is obviously said historically that people want escapism. They want to go away from their daily drudgery, but I won't attribute everything to the fact that there's a slowdown in the economy and that's the only reason why business is performing. It's really taking away all the credit from a couple of things: One is the appetite for people to watch movies in India continues to remain very, very high. Second is that the content pipeline, that is also very good. We do make the maximum number of movies in quantity. But even in quality, now we are seeing that Hindi movies are connecting -- Indian movies are connecting very well with the audience. So somewhere there's a big change in the content as well. And the third in all humility, I think PVR has also done a good job in creating a circuit, which is very reachable and creating a consumer experience, which is very different to anything else in which people can consume movies.

So I think all these 3 factors have also played a key role in making sure that we are able to maintain this performance. So I don't see if all these 3 things are not going to change overnight, and hopefully, we'll continue to see this performance going forward as well.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [4]

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Right. My second question is in terms of number of screens. Is there some closure in West and North because I think in West, there is 4 lesser screens and North around 7, is that true?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [5]

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No, there is no closure. It's just that we go by wherever we can get great locations and some old malls. Is that the question that...

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Unidentified Company Representative, [6]

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No. I think Abneesh, you are comparing it to some previous quarter, there are some reclassification of screens we've done. I think because of that it is reflecting some screen smaller in North versus West, but there is no big change therein. We have not closed down any screens specifically in the previous quarter.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [7]

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But it's area -- so it's a area reclassification.

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Unidentified Company Representative, [8]

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Yes, yes, yes.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [9]

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I think he is talking about the small screen, red carpet or something..

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [10]

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No. It was region, which seems to have changed. So any reason why you're reaching the regions?

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Unidentified Company Representative, [11]

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I mean, we had some internal reclassification in terms of people responsible for running those P&Ls. So accordingly, those screens have been moved around in region. So there is just no closure. It's just a realignment of screens between North and...

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Operator [12]

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The next question is from the line of Urmil Shah from IDBI Capital.

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Urmil Shah, IDBI Capital Markets & Securities Ltd., Research Division - Assistant VP and IT & Media Analyst [13]

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Sir, congrats on the strong performance. I had couple of questions. One was, given the ad performance in Q2, what is your expectation of ad growth for second half and so the full year?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [14]

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Yes. So I think it's just difficult to give any specific guidance on numbers given the environment that we are in. But advertising performance, clearly, I think we've outperformed generally what's happening in the market because of, I think, the long-term partnerships which we have with various clients and some innovative deals that we are doing as the brand becomes larger. We are reasonably confident that we'll continue to grow at a healthy pace even in H2 over last year. It's tough to put an exact number on the specific commentary, but we are reasonably confident that we'll continue to show growth over what we did last year.

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Urmil Shah, IDBI Capital Markets & Securities Ltd., Research Division - Assistant VP and IT & Media Analyst [15]

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Sir, but would it be safe to say that a double-digit growth for the full year would really depend on how the festive season stands out? Otherwise, it would be challenging.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [16]

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No. If you look at the growth now also, as I said, there is no one silver bullet due to which growth comes. It is a number of factors: One is, of course, the content pipeline, which continues to look very strong even in the way the third quarter has started. Second is really the way we are -- the kind of demographic profile that we are attracting in our cinemas. That continues to remain the way it is, the number of people who visit our cinemas. So advertisers look at all that. And of course, the way our circuit is spread across the country, most of the advertisers want their goods and services or products to be advertised on PVR screens. So I don't see any of these things changing as long as the pipeline remains strong, which, as I said, is looking strong. So there is something that is happening that whatever content makers are creating just now, they are connecting with the consumers.

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Urmil Shah, IDBI Capital Markets & Securities Ltd., Research Division - Assistant VP and IT & Media Analyst [17]

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Sure. Sir, next question was both from FY '20 point of view and more the long term also. Given that we are halfway through, we've crossed the 50% of the targeted screen ads, how does the second half look? And last time, we did the caution that maybe in FY '21, poor organized retail can impact the screen addition. So any commentary on that would be helpful.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [18]

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Well, we've already opened 42 screens this -- up to the past first half. And now we have some very big cinemas coming up. We have a project in Dwarka, which will be the largest cinema in upcoming -- the largest cinema in Delhi, which is in Dwarka, 12-screen complex is coming up. And we have another 9-screen coming up. Then we have quite a few. We think that we are on track. We've done 42, and we feel that another 50, 60 should be okay to open this year as well. So all the slowdown that has happened, we've been very careful about choosing our developers and developments, and I think we should be okay.

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Urmil Shah, IDBI Capital Markets & Securities Ltd., Research Division - Assistant VP and IT & Media Analyst [19]

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Sir, and moving for FY '21 and beyond?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [20]

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We have over almost 120-odd screens that they fit out and that we've been very careful in choosing those developers, those developments, who have the ability to be able to finance and fund their malls, get the right tenancy mix. So this kind of growth, 80 to 100, is roughly that we will be seeing in the next year as well.

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Urmil Shah, IDBI Capital Markets & Securities Ltd., Research Division - Assistant VP and IT & Media Analyst [21]

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Sure. And then last bit, if I may, a bookkeeping one. The right-to-use assets, the value has declined as compared to the March number. If you could just make us understand the reason?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [22]

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Yes. I think in the Q1, the auditors had done a provisional assessment of quarter 2 look like. I think with the new leases added, including what we've opened in the first half of the year, they have done a reassessment. And I think based on that reassessment, this is the right-to-use asset that they finally come out with. So there are interpretations that we've assumed on how to set right-to-use assets. So this is the big change that has happened. So you would notice that, I think, even the depreciation and interest provision during the second this quarter is slightly lower than H1 because that is based on the assessment -- final assessment that they've done based on which we have now published those numbers in a final provisional balance sheet and cash flows that have come up.

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Operator [23]

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The next question is from the line of Vimal Gohil from Union Mutual Fund.

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Vimal Gohil, Union Asset Management Company Private Limited - Research Analyst [24]

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My question is a related one to Urmil. Sir, if you could give me a comparable number for June 2019, as well for right-of-use and lease liabilities, please?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [25]

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So you can -- we don't have that number. You can look at that number in the Q1 presentation. It is appearing in the Q1 presentation.

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Vimal Gohil, Union Asset Management Company Private Limited - Research Analyst [26]

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Yes. But you said that there has been some change in the interpretation or there has been some reassessment done?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [27]

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Yes. So there is a provisional -- that was a provisional assessment that was done by the auditors. And on a full half yearly basis, they've done a final assessment because they need to certify the balance sheet as well apart from the P&L. So the right-to-use asset is, again, a function of how do you capitalize your leases over what lease is done. And that's based on estimated useful life. So they have reassessed the estimated useful life of the balance leases based on where this competition has done. I think that number in terms of lease liabilities has come down marginally over what it was calculated in March based on the revised assessment that they've done.

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Vimal Gohil, Union Asset Management Company Private Limited - Research Analyst [28]

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And sir, theoretically, these numbers should go up, right? As long as you keep on adding screens.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [29]

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Yes, but they will keep going down for existing screens, and they'll keep going up for the new screens. So it's very difficult to do a competition to say what will it look like in each quarter, because every quarter, the existing leases are reducing in terms and the new leases are increasing in terms.

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Vimal Gohil, Union Asset Management Company Private Limited - Research Analyst [30]

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The older lease will get renewed as well. So I mean, assuming that...

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [31]

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But older lease is x period of years. So typically in the 50% of the first initial period of the lease, you have a higher charge to the P&L. And when you hit the get the later part of the lease, you have a lower charge to the P&L. So as existing leases has crossed 50% of their lease, anywhere they will become a lower charge in the P&L on account of that. And for the new leases, it will be a higher charge initially. So it's difficult to estimate and quantify a projection of this number on a quarter-on-quarter basis or a year-on-year basis.

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Operator [32]

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The next question is from the line of Keshav Lahoti from Angel Broking.

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Keshav Lahoti, Angel Broking Private Limited, Research Division - Analyst [33]

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Congratulations, sir, for a great set of number. I just wanted to understand how the screen count is moving in the industry, like in the last 1 or 2 years, whether the total screen count in the industry have increased, decreased or more or like, it is flat. It will be better if you can throw some light how is it moving region wise, and how the screen count look in future also?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [34]

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See on a macro level, India continues to remain very underscreened. Obviously, there are very normal examples and comparisons that are done to the U.S. and China and various other countries where movie-going consumption is very high. So I think we are really at the tip of the iceberg. We still have a lot of potential to increase screen count. Of course, one leg of the business that we do is with the real estate sector. But despite the slowdown, there are some very top-quality developers in this country who are still building malls because even the retail -- retailers need expansion. There are new retailers who are coming. So I think, roughly, I would state still about 250 or to 300 screens is something that India would still see growing amongst all the top players. That's the new -- some of the new players in the smaller towns who have come up. So I think that kind of number will be there.

And also you have to see that even if some single streams are closing down, the overall box office revenues will still increase because the multiplexes that ATPs are higher than single screens. And obviously, they're newer with better technology, better facilities. So even the occupancy in multiplexes are higher than they are in single screen. So even though there could be some reduction in single screens than addition in multiplexes, yet the overall box office will increase. It will spread all over the country, there's no one area where more multiplexes will come compared to the other. Yes, smaller towns have also started seeing some penetration. Our own brand itself is expanding very rapidly, which is in Tier 3 towns. So you will see that it's not really only a rural and urban phenomena, it will be urban, semi-urban and rural. So you'll find their growth will be roughly that much that I've said about 250 to 300 screens per annum.

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Keshav Lahoti, Angel Broking Private Limited, Research Division - Analyst [35]

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Okay. How many screens you have in the pipeline like signed agreements of the total screen?

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Unidentified Company Representative, [36]

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We normally don't disclose that number in terms of what our future pipeline of screens is. We can only give a kind of estimate of what we are opening, but we have a quite a large pipeline of screens, which we've signed up for development.

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Keshav Lahoti, Angel Broking Private Limited, Research Division - Analyst [37]

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Okay. One last question from my side. If I see quarter-on-quarter on stand-alone basis, your other expense and employee benefit expenses have reduced slightly. Just wanted to get deep understanding why these expenses have reduced? Like total screen count is increasing, so employee benefit expense should increase. You will have more people. So just wanted to understand this.

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Unidentified Company Representative, [38]

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Yes. You're comparing it to Q-on-Q?

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Keshav Lahoti, Angel Broking Private Limited, Research Division - Analyst [39]

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Yes, quarter-on-quarter.

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Unidentified Company Representative, [40]

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I mean, I think, in Q1, we had some one-off expenses, especially in other expenses because of new property openings that we have seen in Q1, plus we had restarted our flagship property in Bombay where we had spent some sort of capital to relaunch it and that's why the other expenses are going down. In Q1, I think, we had some additional provisions for -- in employee costs as well with some additional incentive provisions being made, and that has reduced.

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Operator [41]

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The next question is from the line of Rajiv Sharma from SBI Capital.

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Rajiv Sharma, SBICAP Securities Ltd., Research Division - Co-Head of Institutional Research [42]

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Just a couple of questions from my side. Firstly, there's been lot of discussion about your premium properties. So just wanted to understand how is this premium game being played? What is the number of properties which have premium and incrementally what you're adding, will you maintain that same ratio? And what will be the revenue contribution from these properties today? And where do you see it from a 2- to 3-year perspective? And lastly, you just mentioned that India is underscreened and across all 250 to 300 screens could be added. So is that the maximum potential you see? Or you believe that's the 2-year number? After that, there will be scope for more?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [43]

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No. As I said, if you compare it to U.S. and China, U.S. is at about 40-odd thousand screens. China must be about 25, 30...

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Unidentified Company Representative, [44]

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55,000.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [45]

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55,000 screens. So that's why I was saying that we are grossly underscreened from that point of view. And India is a very heterogenous market. It's a disparate market. You have a consumer at every price point. So therefore there will be Utsav type screens, which we will be doing, which is -- where the ticket prices will be not -- like INR 100 around. And then you will also have some very premium Lux and Director's Cut type screens where the ticket price can be as high as INR 800, INR 900. So the company is committed to giving a solution to watch movies outside of their homes, get that big screen experience at every price point. So there is no magic, like a set formula that okay, overall, if we've got 800 screens and today, the number fixing at -- the 10% of our screens are premium, but it will always remain. It can be high, it can be low. But we -- our idea is that we create a premium offering wherever we are. Even at INR 100 is a premium offering. Even at INR 1,200 or INR 1,000 is a premium offering. Wherever we'll get opportunity, where the real estate development is of a high quality, it's a location-driven business. The mall is good, we will go there. And the only other trigger that can increase this -- the pace of the screen count will be real estate. I think if more real estate is available -- quality real estate and the real estate sector is doing well and they are making more and more malls.

Retailers, like you've just read about Uniqlo they have come. Like that, there are so many retailers, IKEA, who are still not in India, they don't have a very strong presence. When they come, again the growth gets impacted positively. So I think current -- I've given a number of 250, 300 screens with the current scenario. This easily can be speed it up, even the government has taken a very good view of increasing screen count in India. So I think it's just a number, which is a current number, it can easily -- the pace can easily increase.

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Rajiv Sharma, SBICAP Securities Ltd., Research Division - Co-Head of Institutional Research [46]

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And how much of your revenues would be coming from premium properties today, ballpark idea. And just given that you have to play between (inaudible) and premium, where do you see the ATP growth from our structural perspective in the medium term, 5% CAGR is a good number to assume or one should just built for flat given that there are push and pulls like low end and -- so how should one see that?

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Nitin Sood, PVR Limited - Group CFO [47]

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Yes. So first of all, I think, our -- the premium skill portfolio contributes roughly 10% of our screen content and approximately a similar number to our revenue contribution.

On your question of ticket price growth, I think, we've seen ticket pricing growth effectively should happen in all markets. There is no one thing to say premium screens will grow higher ticket price growth and smaller screens will not see ticket price growth. So I think as long as you build a great product at the right location, our experience say you will see ticket price growth.

And I think if you look at the last 4, 5 years, our average ticket price growth has ranged between 5% to 6%. Our long-term guidance is, there is no reason why it should not grow at a similar nature until really the inflation comes down drastically. It's a separate issue. But our sense is it should grow in a similar range.

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Operator [48]

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The next question is from the line of Ankur Periwal from Axis Capital.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [49]

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Sir, Ankur Periwal this side. So congrats for the good set of numbers. First question on the advertisement. Now while 16% ad revenue growth looks encouraging in this environment, but if I look on a per-screen basis, obviously, there is a de-growth. So my question is whether -- is there any trend that we are seeing maybe bigger national advertiser is cutting out, or, let's say, reducing their spends versus the local or the regional ones, if you can put some light over there?

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Nitin Sood, PVR Limited - Group CFO [50]

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So I think -- one, I think, per screen revenue while it's a long-term right benchmark to look, but we've opened in last 12 months about 100-plus screens. It takes new screens about 12 to 18 months before the advertising revenue can really ramp up. In the first 12 months of opening advertising is a large piece, which actually takes off in a property. So the average looks smaller because of that.

Secondly, you're right that there is general pressure on advertising spends by corporates. And it has -- while it has impacted a lot of other industries, we've managed to deliver a decent growth in spite of that challenging environment. So we are still confident that, I think, we will be able to continue to grow over what we delivered last year. It's difficult to predict in this environment what number will look like, but we are reasonably confident that cinema advertising will continue to remain the key because cinemas are doing well. We are attracting good amount of footfalls. Movies continue to do very well on the ground. So that will continue hopefully during the balance half of the year.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [51]

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Sure. But Nitin, any specific sector or segment wherein you are seeing some slowdown happening across given the content has been good still? So is there any specific sector or companies or segment wherein probably the spends are lower? Or it's generally the trend across?

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Nitin Sood, PVR Limited - Group CFO [52]

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With digitization, you're not necessarily dependent only on sectors, and you're not necessarily dependent on just national sponsors. A lot of local people -- local companies who only want to advertise in local also start advertising with digitization. You don't have to make those 70mm celluloid films anymore. So we always find that there are -- and we have a limited inventory of time anyway. So we are quite okay even if one sector is not advertising.

But as I said, it's got its own unique place in the media planners mind cinema, which is like a completely focused attention on the big screen. And the demographic that PVR is able to attract and that the movie content pipeline doing very well, I think we are finding that even if one or two sectors don't do well, we still get enough advertisers to fill up the number of minutes that we're looking at.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [53]

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Sure, sure. That's helpful. Secondly on SPI. Now if I go back to our interactions, you did mention ad revenue on a -- has a significant potential there from a SPI perspective to variated and (inaudible), let's say, your PVR's yield. Now that impact is already visible in the numbers? Or we will further see improvement over there?

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Nitin Sood, PVR Limited - Group CFO [54]

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Yes. I think you will see further improvement. South, unfortunately, has been a slow year. So while all the box office growth that you see this year seems very strong. I think the slowest segment between North, West and South has been South this year. The local language films haven't done as well as compared to what Hindi and English have done. So we expect South to fire up in terms of box office performance in second half of the year. Also, I think, advertising because of box office being slow will also take off along with box office, but you will see big gains in SPI this year, but much bigger gains I think, this advertising piece will continue to grow in that part of the market, even next year, as we are integrating the full circuit.

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Ankur Periwal, Axis Capital Limited, Research Division - VP of Media and Logistics [55]

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Sure. And lastly, on the screen additions bit. Now obviously, we have increased the run rate what we used to witness maybe 2, 3, 4 years back versus now wherein we are more like 80-plus range on annual basis. From a company perspective, how long do we have a visibility because where I'm coming from is given the current macro, there is a potential that mall development may slow down as well, which may not cancel these, but can sort of slow down the new screen rollout coming in. So this 80-plus screen additions may be looking good from a 1- or 2-year perspective. So what is our visibility over there in terms of time lines?

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Nitin Sood, PVR Limited - Group CFO [56]

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No. We are finding that the mall slowdown is not going to happen. This kind of growth of 80- to 90-odd screens will continue to remain. As I have answered in my previous question, there are a lot of international large funds like Blackstone, like Xander, the Canadian Pension Fund, I mean, all these people are looking at some very good assets. They've tied up with very big reputed developers, and they are giving that essential expertise as well as financing to make sure that the pace doesn't -- at least good quality malls continue to get built. So I don't see any stress there at all. In fact, it can only improve from here on and not really -- there won't be any de-acceleration here.

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Operator [57]

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The next question is from the line of Jinesh Joshi from Prabhudas Lilladher. Please, go ahead.

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [58]

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Couple of questions. First, on the advertising front, basically, what I want to understand is that what proportion of our ads...

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Operator [59]

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Mr. Joshi?

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [60]

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Yes.

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Operator [61]

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Can you speak closer to your handset, please? You're not...

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [62]

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Am I audible now?

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Operator [63]

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Yes. This is a little bit better.

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [64]

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Yes. So I -- what I want to know is that what proportion of our ads typically come from outside media planners? And how are the incentives built to them accounted for? And also, if you can just help me understand whether the rates given to the customer by our in-house sales team and outside media planners are they the same or do they vary?

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Nitin Sood, PVR Limited - Group CFO [65]

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They are the same, and it doesn't vary at all. But when you say outside media planner, what does that intend?

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [66]

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I mean we have an in-house sales team, right? Which will get ads for us, which will be displayed in our cinema, and there would be certain third-party media aggregators with whom we'll interact with and we get ads for our cinema. So we might pay some incentives to them to display the cinema in our circuit. So how, how...

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Nitin Sood, PVR Limited - Group CFO [67]

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So we don't work on that model. We don't pay any incentives to any aggregators. We sell media inventory because media is a perishable commodity. Our team decides what is the right price for a certain ad at a certain location, and we price our ad inventory to our internal pricing model. Beyond that, we can't tell operating specifics.

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Unidentified Company Representative, [68]

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These are all net of any payouts to be made to anyone. So the revenues that you see are all net of any payouts being made to on any accounts, whether internal or external.

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [69]

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Okay. And sir, (inaudible) I understand that the ad rates vary as per location and the perception of the movie. But just can you share what is the average yield per 10 seconds that we typically fitch in our circuit?

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Nitin Sood, PVR Limited - Group CFO [70]

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No, we will not want to share that. That's the operating data. We don't want to share operating data on our advertising fees.

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Jinesh Joshi, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [71]

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Okay. So one last question on the tax front. I mean since we have decided to pay the tax as per the regular rate and have decided not to go for the lower rate. Our taxation for FY '20 and '21 will be in the region of 35%, right, as far as the P&L is concerned?

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Nitin Sood, PVR Limited - Group CFO [72]

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Yes. So see, effectively, our average tax rate is up 20% on our cash tax outgo because we have lot of eligible MAT credits. So as and when we'll exhaust the MAT credit, we'll move to the new scheme because our effective tax rate today is below 20%. Yes, from an accounting perspective, till the time we are in the old regime, we'll have to provide for deferred tax and accordingly provide for a 35% tax, but that should get over in next couple of years once we exhaust our MAT credit entitle.

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Operator [73]

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The next question is from the line of Swagato Ghosh from Franklin Templeton.

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Swagato Ghosh;Franklin Templeton;Analyst, [74]

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Sir, if I look at your segmental results, so there is a one-line item, which is others, which includes movie production, distribution, gaming, that has seen a jump this quarter. Can you please explain why?

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Nitin Sood, PVR Limited - Group CFO [75]

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Yes. So that's -- largely a large component of that is our VPS income. And I think VPS income is a function of number of films released during the quarter. So that could be one big reason for the increase -- for the...

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Swagato Ghosh;Franklin Templeton;Analyst, [76]

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(inaudible).

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Unidentified Company Representative, [77]

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Okay. So you are saying that because there were more number of movies released, this number has gone up. Is that a fair way to look at it?

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Nitin Sood, PVR Limited - Group CFO [78]

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Talking about -- are you talking about which -- from which specific line item are you referring this to?

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Swagato Ghosh;Franklin Templeton;Analyst, [79]

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I'm looking at your results release, segmental revenues. So outside of movie exhibition, there is this others, which according to your definition, includes movie production, distribution and gaming.

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Nitin Sood, PVR Limited - Group CFO [80]

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Okay, Okay. So you're referring to the SEBI results. So in that, large -- reason for that increase is increases in PVR Pictures revenue on the film distribution where we have distributed a lot of local Hindi content this quarter, and that's the main reason for the increase in revenue.

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Swagato Ghosh;Franklin Templeton;Analyst, [81]

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And can we expect this to continue at this level?

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Nitin Sood, PVR Limited - Group CFO [82]

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Yes, I think, yes. We are doing a lot more active Hindi film distribution, and that will continue at this level during the rest of the year.

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Swagato Ghosh;Franklin Templeton;Analyst, [83]

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Okay. Which are the movies we've had distributors to, this quarter?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [84]

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One of the big successes we had in Q2 was Super 30. In addition to that, we also released Batla -- House on 15th August. That also -- it's also a hit at the box office. And the other film, third film, that we released was Saaho, which was a Tamil version in Tamilnadu. That did reasonably well for us. So these are the 3 main films. But in addition, we also did Rambo, Angel Has Fallen. So there were a lot of several Hollywood films, which also got released in Q2. It has been a fairly productive Q2 from distribution perspective.

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Swagato Ghosh;Franklin Templeton;Analyst, [85]

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Understand. And sir, margin on this set of revenues would be how much ballpark numbers would be okay, percentage margin?

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Nitin Sood, PVR Limited - Group CFO [86]

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It's -- we look at this business and we encourage investors also to look at this business on a full year basis because the release dates and performance of films changes from film-to-film basis. In terms of overall margin, as far as the operating margin is concerned, we expect PAT to be somewhere between 5% to 7%.

You have to also acknowledge the fact that this is a working capital business. I think your operating PVR Pictures, the distribution business at a fairly low capital base. So the return on equity in that context is fairly...

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Unidentified Company Representative, [87]

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Comparable to what we do in PVR.

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Nitin Sood, PVR Limited - Group CFO [88]

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Is comparable.

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Unidentified Company Representative, [89]

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Potentially, I think, what we run a -- it's like a low margin, but high working -- high turnaround business. So we look at this business not in terms of profit margin because profit margins will look lower, but more on about return on how much capital that we've invested.

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Swagato Ghosh;Franklin Templeton;Analyst, [90]

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Understood, understood. Now that's fair, that's fair. And sir, second question is, I just want to understand, during good quarters like the last one, do we have more space to push more time like more minutes of advertising, like when a movie is doing well, can we push more minutes into the screenings because the general sentiment is good, or how should we think about it?

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [91]

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First and foremost, we are guided by a certain policy that we have dictated, which keeps in mind the consumer experience. But having said that, there would be only certain weeks with certain films that we do have more time. Still there are areas which could be exploited much beyond the onscreen. So we don't -- our teams don't just look at onscreen space and time, we are now seeing offscreen and sponsorships also a driver for revenue. So to be more specific to your point, yes, there is time. And yet, even if we are running full house in terms of advertising with some big films in the first week, by the second week, we definitely get time on those same films as we move forward.

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Swagato Ghosh;Franklin Templeton;Analyst, [92]

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Okay. And sir, currently, offscreen would be what percentage of our advertising revenues?

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Nitin Sood, PVR Limited - Group CFO [93]

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Currently, it's about 10-odd percent and has a huge potential to grow.

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Swagato Ghosh;Franklin Templeton;Analyst, [94]

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And sir, 2 years back, the 10% number would have been how much?

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Nitin Sood, PVR Limited - Group CFO [95]

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Should be in the vicinity of about 5%.

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Swagato Ghosh;Franklin Templeton;Analyst, [96]

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Understood. And sir, one last question from my side. This week sees the release of a Netflix movie, I think this is first of its kind drive, which has certain big Bollywood stars versus theatrical release, the pipeline is not that good. So do you think this would be sort of litmus test for the theaters in India per say that how can they cope with OTT movies based on what we see in the next 2, 3 days?

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Kamal Gianchandani, PVR Limited - Chief of Business Planning & Strategy [97]

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I'll answer the second part of your question first. The lineup for this quarter, October specifically, is fairly attractive. We've started the month of October, the third quarter with a bang, War, the Telugu film, in addition to that Joker, all have done unprecedented business at the box office and continue to show great legs. So this success will be sustained till the Diwali period and on 25th, we've called Housefull 3, a very, very successful franchise.

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Unidentified Company Representative, [98]

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Housefull 4.

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Kamal Gianchandani, PVR Limited - Chief of Business Planning & Strategy [99]

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Housefull 4, I stand corrected. The Housefull 3, by the way, was also a big success. And thereafter, we've got flu of films week after week. So we don't see any disruption or any problem with the release schedule. The number of firms, the quality of films, the curiosity around the firms remains at peak. We are having one of the best years on the back of a year, which was enormously successful. In fact, the best year that we've seen in the last 10 years, I'm referring to the last financial year. So that's answer to one part of your question.

The second is, this is -- I mean, this is not the first time it's happening. Netflix and other OTT players have shown films direct on their platforms. The -- OTT is a new concept, but before this, there was DVD. Before this, it was -- there was -- the concept was spread to television. The point I'm trying to make is that multiple platforms is actually good for business. There is a positive cycle between multiple platforms and the benefit that accrue to cinema, because, ultimately, these platforms are investing money in film business and producers have another way to slice and dice their content, get more revenue for the same film and that money gets reinvested making bigger and better films.

So firstly, it's not a new concept. And secondly, in a counter-intuitive way, it's actually a big positive for film business.

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Unidentified Company Representative, [100]

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And to add to Kamal's point, I think this debate of saying that it fits in our business size only because of content something which we've been really debating because how multiplexes have evolved, it's all today about an out-of-home experience. We are saying we are more about experience, we are more about bonding, we are more about memories that we are creating at our cinemas. Yes, of course, the reason being content, but content alone is not the reason. So if somebody was to say that all content will be available in OTT, believe me, consumers will not be that happy simply because they don't want to sit at home all the time and be watching movie. So the need for people to get out and entertain themself is something which is more fundamental to our business. So we are -- we've actually stopped calling ourselves to say we are just in the business of showing movies, we're in the business of entertainment and that's really what it is.

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Operator [101]

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(Operator Instructions) The next question is from the line of Darpan Thakkar from HSBC.

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Darpan M. Thakkar, HSBC, Research Division - Analyst [102]

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Congrats on very good result. My first question is the comparable -- for comparable properties, employee expense has gone up by 18%. Is there any one-off there?

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Nitin Sood, PVR Limited - Group CFO [103]

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Yes. There's some one-off expenses in this, but there has also been some minimum wage increases in a couple of states, like Delhi and Bangalore, which has got impacted here. So that's reflecting in this.

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Darpan M. Thakkar, HSBC, Research Division - Analyst [104]

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Okay. And on advertisement front, if we exclude SPI Cinema advertisement, what will be the growth rate there? If I'm not wrong, it will be somewhere around 8.9% for PVR stand-alone?

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Nitin Sood, PVR Limited - Group CFO [105]

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See, we've given SPI numbers separately. SPI total revenue is about INR 9 crores out of the total advertising revenue of INR 93 crores, INR 93.5, INR 94 crores. So if you exclude that, you can calculate the growth. It will be about 8%, 9%, yes. Overall, growth will be about 8%, 9%.

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Darpan M. Thakkar, HSBC, Research Division - Analyst [106]

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Yes, correct. And screen for PVR only has increased from INR 643 crores to INR 725 crores, right? 12%, 13%...

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Nitin Sood, PVR Limited - Group CFO [107]

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Yes. 72 or 75 is SPI screens and the balance is PVR screens. So they have combined, it's now 800 screens.

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Darpan M. Thakkar, HSBC, Research Division - Analyst [108]

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So basically, for stand-alone, only PVR screen growth rate is at 13% and advertisement growth of 8% to 9%. So 16% jump is because of SPI you have been able to do increase the advertisement rate per screen there that is showing in this quarter. So from next quarter, do you think this advertisement growth can go in single digit again? Or you will be able to maintain double-digit growth there?

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Nitin Sood, PVR Limited - Group CFO [109]

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As I said, first of all, you said -- I explained earlier that average per-screen growth number is a relative number because new screens, advertising is the last piece to catch up because till the time screen don't start attracting footfalls and don't grow up in value, they don't become part of advertisers plan. So typically, new screen ramp up on advertising takes about 12 to 18 months minimum before advertising kicks off in a big manner. And considering the fact that we have added large amount of screens in last 12 months, that number in terms of contribution is lower, or same screen growth has been about 5% to 6%, which is quite decent in the current environment.

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Darpan M. Thakkar, HSBC, Research Division - Analyst [110]

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Okay. But for the rest of the half double-digit growth is possible, or...

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Nitin Sood, PVR Limited - Group CFO [111]

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I don't want to comment on any specific numbers.

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Operator [112]

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The next question is from the line of Prateek Barsagade from Edelweiss.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [113]

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This is Abneesh, some follow-on questions. First is in terms of the 3D glass up charge which you are doing, what is this number in this quarter? And what was it, say, 3 years back. Just want to understand how the impact is from a longer-term basis.

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Nitin Sood, PVR Limited - Group CFO [114]

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I don't think there is any significant change in that number because effectively, there is no ease in what we were charging earlier. It really is a function of 3D content in that specific period. I don't have a comparative number of 3 years ago with me right now versus what is it right now, but I don't see broadly any substantial change in that number. I can share that number with you separately.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [115]

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Second is, SPH, you've done really well, the 12%, 13% growth. In this, how much will be the price growth and how much will be the mix growth? Mix improvement.

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Nitin Sood, PVR Limited - Group CFO [116]

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I -- broadly, I think it will be 60%, 40%. Price being 60% and in terms of product mix change about 40%. If you recall last year, we had taken lot of price correction, et cetera, and also redone the product portfolio. So I think some of the cuts that we have taken last year in those markets, we've managed to get a price hike back. And over the last 12 months, we've done a lot of product portfolio changes, new product introductions, which are helping us to, I think, increase our consumption at the cinemas. And we are quite confident on the F&B portfolio to continue to do well on a long-term basis.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [117]

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And one related question was Zomato and some of the other food take apps are currently having a fight with the restaurants due to which discounts are reduced and listings are reduced sharply. So if the same customer, so if he is ordering or eating less through these food take apps, does it mean good news for you because now customer will feel that "outside it's more expensive than earlier, so I can order when I'm actually going for the movie, I can order then." Do you think that can happen? Or it's two stepped.

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Unidentified Company Representative, [118]

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No. So quite honestly, we haven't thought about it this way. If that happens, that's additional bonus, but we haven't really thought about it that way. In fact, we are looking at alternate channels partnering with people like Swiggy and Zomato to even get some of our marquee products available in customer homes. So the plan is, I think, how do we create a signature products and product portfolio available to consumers who want to kind of order them at home. So we are working on that front, adding more tentacles to our F&B portfolio. And really focusing on working on improving the quality of F&B that we serve at cinema, which I think, is a direct correlation to consumption more than anything else.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [119]

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And one last one on SPH again. So you report the formula at the back of the presentation which says that SPH is gross F&B by admits. So if you add, say, for example, INR 3 crores kind of footfalls, that's the number we are getting. But my question is out of the INR 3 crore, how much -- how many customers are actually ordering? Is that number something you can share?

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Nitin Sood, PVR Limited - Group CFO [120]

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So see there is no signs to -- there is no specific number because you can't track that number. It's a broad maths. The way to look at it is as follows. Your average number of transactions by a customer is about 2.5 to 2.6 transactions per customer. We typically, on an average, have about close to a 30% strike rate. Some quarters marginally lower, some quarters marginally higher. So effectively, if you multiply 30% strike rate which means 30% of the total people hitting the candy bar and everyone is buying for their family, which is 2.6 tickets sold in every transaction, you get to average of about 75% number, but some of the people end up buying twice. There is no way to measure how many, what percentage of that people is. So if you discount that number by, say, 20%, you broadly come to the math that 60% of the people are typically buying and 40% of the people are not buying.

So effectively when you look at the average spend per head, it is divided over across the entire base. The average spending for people who are buying is much higher because you have to calculate that by roughly over 60% of the population. That's the broad maths. So you multiply it by 1.5x...

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [121]

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Sir, why don't you report per order rather than dividing by the whole universe? Number of orders, obviously, you can easily track, right?

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Nitin Sood, PVR Limited - Group CFO [122]

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Number of orders, we can track. But I think this is the terminology or the methodology, which typically is -- we track a lot more internal parameters while we measure F&B. But I think this is the most well measured and tracked parameter across the industry across the globe. I think that's the terminology, which is most easily understandable by everyone. So that's what we end up reporting. There are a lot of different parameters on F&B we track internally, but I think we don't want to confuse the market with the same.

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Abneesh Roy, Edelweiss Securities Ltd., Research Division - SVP [123]

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Sir, last question, if I may. In terms of South India, we are seeing multiple quarters how South Indian content not doing well there. Is there a systemic shift that now Hindi and English content is becoming more popular, more cosmopolitan and better dubbing and all that? Do you think that's the reason?

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Unidentified Company Representative, [124]

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Like I mentioned earlier, I think, like distribution business, you have to see exhibition business also on 12 months basis. So I would not jump do any conclusion at this point. Asuran which released last Friday, in fact, last to last Friday, it's a film with Dhanush, one of a popular actor in Tamil cinema, has done exceedingly well. There is a Vijay film coming out this Diwali. Vijay is the raining superstar in Tamil cinema, expected to open really big. Saaho, we all know had a reasonable amount in success in regional languages, turned out to be a blockbuster much better-than-expected results in Hindi, and it wasn't basically dubbed, it was a trilingual film, it was actually made in Hindi, Telugu and Tamil. Sye Raa Reddy which came out recently with Chiranjeevi has done hugely well in home market, which is Telugu, Telangana and Andhra, has done reasonably well in Hindi also.

So point I'm trying to make is that regional cinema like Hindi cinema has this peaks and values. We've had phases in the last 2 quarters, quarter 2 and quarter 1, where some of the expected films have not done well. But at the same time, there are many good films later to come later in Q3 and Q4.

One underpinning trend, which I would like to point out, which is important for our business is that the Telugu or Tamil or even [Kannada] for that matter of fact is dubbed in Hindi has started doing extraordinary business. Saaho's business, and I don't have the official numbers, I am also basing my comment on numbers which are available in public domain, has done close to INR 150 crores net box office in the Hindi language alone. So excluding entire South in the remainder of the country in Hindi language, Saaho has done INR 150 crores, which is higher than a lot of Hindi films performance at the box office. Now that's the trend, which is extremely encouraging because these larger-than-life high production values, films, which are basically something for everyone that's sort of a concept, masala films, commercial films as we call them.

Our catering to audiences in a way universal manner. So even cinemas, which are in smaller towns, multiplexes, single screens are doing roaring business. So I think there are a lot of positives, which are emerging from regional film industry. And at the same time, we keep looking at South of India, but let's not forget Gujarati, Punjabi, Bengali, Marathi, they are all prolific suppliers of films. They may be a small portion of our overall revenues, but everything is adding up, and these industries are getting bigger and bigger with every passing year. So all in all, I think, please look at business on 12 months basis, and there are a lot of positives. Yes, there have been a couple of disappointments, but that's the nature of our business.

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Operator [125]

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We'll take the next question, which is from the line of Karan Taurani from Elara Capital.

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Karan Taurani, Elara Securities (India) Private Limited, Research Division - VP & Research Analyst for Media [126]

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I have this question on footfall growth on a comparable basis, it's come at about 5%. So we've been talking about a very good quarter, 5 movies doing more than INR 100 crores collection, Lion King did very well in the Hollywood segment. Why is [SPI] so disappointing? Are you guys using market share or something of that sort?

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Nitin Sood, PVR Limited - Group CFO [127]

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I didn't understand disappointing. We have a same-store growth of 6% in footfall. So I'm not clear why it is disappointing because we are quite happy with the 6% same-store growth in footfalls coming on the back of a very strong year that we had last year. So we are quite happy with it.

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Unidentified Company Representative, [128]

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Yes. But Karan, I think just to add to Nitin, this 6% is also inclusive of what you discussed the underperformance in the South. We have now 1/3 of the portfolio in South, which appreciate a fairly high occupancy. And we had until now couple of quarters where this content performance in South hasn't been as strong as we anticipated it to be. So that's the benefit of having a diversified mix. You will have situation where a Bollywood sort of does well and your overall network does not deliver that kind of growth because you have a South presence, but you will also not see a situation where we have a big standard variation in our performance just because one of the industry isn't doing well.

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Karan Taurani, Elara Securities (India) Private Limited, Research Division - VP & Research Analyst for Media [129]

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But if you look at the numbers in South, I mean, you (inaudible) but I think there was Saaho which was close to almost INR 50 crores to INR 70 crore of collection in the regional genre. So is there a base effect also on that? Or is it that -- what exactly has happened in South films.

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Nitin Sood, PVR Limited - Group CFO [130]

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So South films have lower performance as compared to last year. So footfall growth in South has been much below and the Bollywood film industry is much better. So North and West have done much better in terms of same-store footfall growth as compared to the Southern region, which is really underperformed and that is reflective. We have shared the SPI financials separately. So even if you look at the average occupancy in that circuit in -- as compared to Q2 of last year is down by 4%, 5%, largely because the content has been slower in that market.

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Karan Taurani, Elara Securities (India) Private Limited, Research Division - VP & Research Analyst for Media [131]

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Is it fair to say in South if you include SPI, you would have grown higher (inaudible).

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Nitin Sood, PVR Limited - Group CFO [132]

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Not just SPI, PVR's own South circuit has a similar trajectory. So effectively, if you exclude South then our average growth for the North and West has been much stronger this quarter because Bollywood films have done really well. So yes, that's correct. But that's the advantage of having a diversified circuit that you are able to balance out the troughs and valleys on the performance across various multiple sectors.

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Karan Taurani, Elara Securities (India) Private Limited, Research Division - VP & Research Analyst for Media [133]

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Valuable properties here primarily would exclude SPI and also exclude (inaudible).

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Nitin Sood, PVR Limited - Group CFO [134]

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Karan, I think, even if you see PVR on portfolio excluding SPI, we've had a fairly large portfolio outside of SPI in South. We rent a lot of properties in Bangalore, Chennai, Hyderabad in the last 2, 3 years.

If you look at the total screen count on the first slide of our presentation, which shows that we have roughly 272 screens in South India, which is the largest part of our circuit. Out of which, SPI is only 72 screens. PVR is 200 of its own screens in South India, apart from SPI, so which put together 272. And once the local film industry has not done well, 1/3 of the circuit is actually not tracking as well, which is largely dependent on local language content has not done as great as rest of the country, which is North and West, which has a stronger performance. So effectively, when you look at the average, the average has got pulled down because of South.

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Karan Taurani, Elara Securities (India) Private Limited, Research Division - VP & Research Analyst for Media [135]

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Yes, got it. So you're basically more skewed towards all market [average] focusing on North and West?

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Nitin Sood, PVR Limited - Group CFO [136]

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Yes, yes.

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Operator [137]

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We take the last question, which is from the line of Swagato Ghosh from Franklin Templeton.

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Swagato Ghosh;Franklin Templeton;Analyst, [138]

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Yes. Thanks for taking the follow-up. Sir, one quick clarification. In the expenditure analysis, Slide 19 of your presentation, you have given percentage of move exhibition cost was 44.4 percentage this quarter, but I'm getting a different number. So can you please explain what are the numerator and denominator for this calculation?

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Nitin Sood, PVR Limited - Group CFO [139]

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Yes, I think you must be looking at consol financials. We have given this number, basis is stand-alone financials which is the exhibition numbers. The consol financials includes a large part of our film distribution business. So those numbers will not be comparable when you do that math. You should do this based on the stand-alone numbers.

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Swagato Ghosh;Franklin Templeton;Analyst, [140]

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Okay. No, I'm just taking the income from sale of movie tickets. Like when you say calculate this number isn't the denominators, the income from sale of movie tickets only?

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Nitin Sood, PVR Limited - Group CFO [141]

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Yes, you're right. But when you look at the exhibition cost at the numerator, you will have to take the movie exhibition cost as reflecting in the stand-alone financials and not in the consol financials, because the consolidated financials, the movie exhibition costs from film distribution is also clubbed there.

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Swagato Ghosh;Franklin Templeton;Analyst, [142]

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Right. But I'm actually getting a lower number. So even if I take the higher number of INR 198 crores from the consol as the numerator and take in the denominator, if I take INR 492 crores, I'm getting a contributor number.

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Nitin Sood, PVR Limited - Group CFO [143]

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I think there are lot of elimination issues because we also get -- we also -- PVR Limited also procures movies from PVR Pictures. So there is lot of intercompany elimination that we have to do when we publish our consolidated results. So the simpler way to simply do this is just look at the cost divided by stand-alone film revenue. You will not be able to exactly match the number because of accounting reasons you have to do a lot of elimination in reporting of related party, 100% subsidiary transactions. So this is the actual cost.

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Swagato Ghosh;Franklin Templeton;Analyst, [144]

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No. Yes, sir, I understand. So -- yes, so every quarter, this number doesn't match exactly. But this quarter, there is a very large gap. I'm sorry to harp on this because I just want clarification on this because the gap is quite large.

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Nitin Sood, PVR Limited - Group CFO [145]

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No, no, fair enough. Swagato, I think the point is, this quarter, we have had a big number coming from...

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Unidentified Company Representative, [146]

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Film distribution results.

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Nitin Sood, PVR Limited - Group CFO [147]

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Yes, so that's why the number has increased.

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Unidentified Company Representative, [148]

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So if you look at our film distribution revenue, this quarter it is INR 65 crores, which was less than INR 20 crores in the previous quarter.

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Nitin Sood, PVR Limited - Group CFO [149]

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So whole of last year's revenue was less than INR 50 crores (inaudible) likely that's the reason.

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Operator [150]

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I now hand the conference over to the management for closing comments.

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Ajay Bijli, PVR Limited - Promoter, Founder, Chairman & MD [151]

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I'd just like to thank, everyone, for taking out time to attend PVR's Q2 earnings call. In case any of you have any follow-up questions, which we've not been able to answer, please feel free to write to me or my colleague, Rahul Gautam. We shall be happy to address your queries. Thank you very much.

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Operator [152]

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Thank you. Ladies and gentlemen...

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