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PVR Goes Beyond Cola And Corn, Grabs A Bigger Bite

Bloomberg

What to have at a movie hall? Cola and corn, of course.

PVR Ltd. goes beyond the standard fare, offering pizzas and pastas apart from other snacks. And that has helped India’s largest multiplex chain earn twice as much from every screen compared to its rival INOX.

PVR’s operating income per screen grew 46 percent over the last three years to Rs 6.9 crore. That compares with an over 10 percent decline for INOX to Rs 3.5 crore. PVR’s food and beverage income rose 26 percent during the period, more than double the pace of its rival.

The company’s menu offerings beyond the popcorn and cola have become meal replacements during the 150-minute movie run-time, driving the food and beverage spends at its multiplexes, analysts at Ambit Capital said. Per head F&B spending at the chain rose at a compounded annual growth rate of 15 percent over the last five years and will continue to drive growth in future, the brokerage said.

Nearly 70 percent of the analyst tracked by Bloomberg have a buy rating on PVR, and the consensus target price of Rs 1,588 offers a return potential of 9.5 percent.