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Good evening, ladies and gentlemen. I am Pavan, moderator for the conference call. Welcome to PVR Limited Q4 and FY '21 Earnings Conference Call. We have with us today, Mr. Ankur Periwal. [Operator Instructions] Please note that this conference is recorded.I now would like to hand over the floor to Mr. Ankur Periwal. Thank you, and over to you, sir.
Yes. Thank you. Good evening, friends, and welcome to PVR Limited's Q4 and FY '21 Conference Call. As usual, the call will be initiated with a brief management discussion on the overall performance for the quarter and for the full year, followed by an interactive Q&A session.Management team will be represented by Mr. Ajay Bijli, Promoter and Chairman; Mr. Sanjeev Kumar, Joint Managing Director; Mr. Gautam Dutta, CEO PVR, Limited; Mr. Kamal Gianchandani, Chief of Business Planning and Strategy and CEO, PVR Pictures; Mr. Pramod Arora, Chief Growth and Strategy Officer, PVR Limited; Mr. Nitin Sood, CFO, PVR Limited; and Mr. Rahul Gautam, SVP and Head Corporate Finance. Over to you, Mr. Bijli, for the initial remarks. Mr. Bijli, I think you are on mute, I'm not able to hear you.
Sir, just 1 moment, sir. Dear participants, please stay connected. Bijli sir, over to you.
Yes. Thank you. Hello?
Yes, Ajay, sir. Over to you, sir, for the initial remarks.
Okay. So everyone is there. Okay. Good evening, everyone. I'd like to welcome you all for the earnings call of PVR to discuss the audited results of Q4 and for the full year FY 2021. Just want to start by expressing my sincere wishes to all of you and your families, along with your colleagues and friends, hope everybody is in good health in these challenging times.I also like to thank the frontline workers for their selfless service that they've been imparting since the start of the pandemic. These are challenging times indeed. With respect to our financial performance, we're going to give you some set of -- share some set of numbers with you. After removing the impact of Ind AS 116 on lease accounting, these are different from the reported numbers we submitted to the stock exchange earlier today.So for the quarter ended March 31, 2021, the total revenue was INR 191 crores. EBITDA loss was INR 118 crores and PAT loss was INR 272 crores as compared to revenue of INR 662 crores. In the same period last year, EBITDA was INR 59 crores and PAT loss was INR 48 crores for the quarter ended March 31, 2020.For the year ended March 31, 2021, total revenue was INR 310 crores, EBITDA loss was INR 424 crores and PAT loss was INR 365 crores as compared to a revenue of -- full year revenue of INR 3,452 crores, EBITDA of INR 614 crores and PAT of INR 131 crores for the year ended March 31, 2020.As you can see from our results that COVID-19 pandemic has had a huge impact on our business. To withstand this crisis, however, the company continues with a strategy of aggressively controlling costs and also shoring up liquidity. We were able to reduce our fixed costs for FY '21 by 63% as compared to FY '20. This included a reduction in rent by 79%, CAM by 42% and all other fixed overheads being reduced by 57%.Company was able to shore up its liquidity using a judicious mix of debt and equity. We raised total liquidity of INR 1,600 crores during the course of the pandemic, which included INR 1,100 crores of equity raise and balance INR 500 crores from debt.As on 30 April 2021, the company has liquidity in excess of INR 750 crores, which I believe is sufficient to sustain its operations and meet all its obligations. Even though business is disrupted at the moment, we continue to remain bullish on the growth opportunity, the cinema business has in India. Globally, a pent-up demand for theatrical exhibition of movies has been witnessed, evidenced by record-breaking box office collection in countries where theaters have been allowed to open.China has surpassed USD 3 billion in collections by mid-April 2021, which is almost equivalent to the entire ticket sales of 2020. Some of the movies that have set box office ringing globally are Detective Chinatown 3, Hi, Mom, Demon Slayer: Mugen Train in Japan, Godzilla vs. Kong, Mortal Kombat and now recently, A Quiet Place 2 in the U.S.Closer home, while things are looking better for exhibition industry, in Q4 FY '21, given the success of regional South Indian films, Master, Uppena, Jathi Ratnalu, et cetera, Hollywood releases, Tenet, Godzilla vs. Kong, Wonder Woman 1984 and Bollywood movie, Roohi, easing of capacity restrictions and announcement of release dates for producers. However, the second wave of COVID has caught everyone offguard with its rapid spread of infection.As infection load is reducing, however, various state governments are now talking about unlocking business activities. Having seen the response to the box office collections and markets where COVID has considerably been controlled, we are pretty confident that our business will bounce back more strongly than ever once things normalize in the face of mass vaccinations.With these opening remarks, I open the platform for any Q&A. Thank you very much.
[Operator Instructions] The first question comes from Mr. Abneesh Roy from Edelweiss.
Sir, my first question is can you please...
Mr. Abneesh, sorry to interrupt you. Your voice is breaking.
Yes. I can't hear, Abneesh.
Yes, yes. One second. So is the voice clear now?
Yes, sir, better.
So my question is on Hindi movie release in the coming months. What we had seen in November to March, Bengali and South Indian movies were much more proactive and they were releasing first, but what we saw was Hindi movies, especially the big ones, were quite cautious and not announcing and delaying.Now what we are seeing is Hindi belt has seen, obviously, very high wave 2 COVID cases. Taking all this into picture plus the fact that some U.K. and U.S. markets have opened up, what is your personal feeling on Hindi movies? Will they again be cautious versus South Indian and Bengali movies in terms of release dates?
So, I mean, actually, partly, you've already answered your own question. But I think with the U.K. and U.S. and Middle East and some of these places becoming an important diaspora overseas market for Hindi movies, I think now the chances are very high once the things open up. So only when things open up in India, vaccination is done, say, a couple of months or 8 weeks from now, I think the fact that overseas has opened is a big one, and Hindi movies definitely are very different from regional movies like South Indian films because they are only meant for a certain region.And the overseas market is limited, but Hindi is placed across the entire spectrum of the country. So I think when things get unlocked in most of the states, then I think we will see Hindi movies coming up as well now as opposed to what happened earlier because even though India had opened up, but overseas were shut. So we will see some big movies getting released as soon as things open up.
A follow-on question to this is, overseas markets have started opening 1 month back also, but we saw a big budget movie like Radhe come on OTT. Now we all know that big budget movie on OTT doesn't make a financial sense. So why do such movies still go on OTT in spite of U.S. and Europe markets opening up plus knowing that financially, it is not -- doesn't make sense when compared to a multiplex launch.
I think everybody has got own -- Kamal is also on the call, so maybe he can also add to my comments. But my view is that everyone is -- has got his own compulsion. And some people are willing to wait for theatrical because theatrical continues to get 60% to 70% of any content revenues, monetization still happens from theatrical, so some people like Sooryavanshi, 83, very big movies, which are coming up, they're ready to wait.And some people can say that fine, there is uncertainty just now, cinemas are shut, vaccination hasn't happened, we don't have the holding power, and let's release it. So I think it is an aberration period and if people want to sort of experiment it's fine.So in this particular case, as you said, U.K., U.S. has already opened, but India was shut. And India is a very big market for a movie like Radhe. On Eid, especially Salman movie, they do well. So they just went ahead and took a call and released it on the OTT platform, but that's fine.I feel that India has got enough movies coming that if one such experiment happens with a big film also, it doesn't really matter much because there's enough pipeline coming and there's enough confidence from the film fraternity to support theatrical, which has been proven by international markets as well and recent examples of movies like Quiet Place, Godzilla vs. Kong, so many films which are coming up on the big screen, which know that the revenues -- highest revenues will come from that. And Kamal, you'd like to add something to that?
Sure, sure. Mr. Bijli has covered everything, Abneesh. I would only add that it was an experiment. Radhe was a big experiment because it was the first big film to go the pay-per-view route in India. Please keep in mind that as far as the overseas markets are concerned, they followed a window in the overseas markets. So whichever country or territory the film had released theatrically, it wasn't available on pay-per-view model. So exhibitors across the globe have taken similar position on such matters. Radhe was a big experiment.And I think there is a fair amount of consensus that the experiment does not work. One would say, unfortunately, from overall film entertainment point of view, India is not a market where pay-per-view is a popular platform, unlike U.S. and European market where pay-per-view is widely accepted, and there are experiments in the past, which have worked quite decently. India, unfortunately, is not in that category. I would only end this point by saying that it's unlikely any other big film would adopt this experiment or this route going forward.
Sure. That's helpful. My last question is on single-screen theaters and your expansion into Tier 2, Tier 3, Tier 4 markets. So in the last 1 year, the entire industry has seen very tough times. My sense is that the industry would have faced even tougher times. So any sense of data you have wherein you can put some numbers there? How many will not come back? Because still it will take 3, 4 months for full revival of the industry best case scenario.Second is in terms of screen additions, does your numbers go up because of this? Again, I'm asking from a 3-4 year's perspective. FY '22, let's forget, in terms of screen addition, I'm not asking that question. Taking normalcy in FY '23, '24, '25, does your screen addition assumptions go up because it becomes more viable because competition has reduced either from single screen or from smaller multiplexes?
Nitin -- sorry. Go on.
Nitin, can I request you to answer it?
Yes. Kamal, why don't you answer the first part of the question around single screens, and then I'll take the second part.
Sure, sure. So Abneesh, as far as single screens are concerned, it's a mixed bag. What you're saying is correct for a lot of exhibitors, but for a lot of exhibitors who own the property, who own -- who work on skeleton cost structures, the damage has not been that severe. They've managed to survive this pandemic phase, especially the ones who got other resources -- other sources of revenue, they've managed to scrape through this pandemic phase quite comfortably. But then you're right, a lot of other exhibitors, who were totally dependent on exhibition business, have suffered a lot.Our sense is in November till March when cinemas reopen, it was difficult to assess as to how many cinemas, single-screen cinemas did not open because of lack of content versus number of single-screen cinemas, which did not open because they didn't have the capacity to reopen. But now I think it's becoming more clearer that about -- out of the total capacity of about 9,000 screens, out of which about 3,000 screens are multiplex screens, balance about 5,500 to about 6,000 are single screens, roughly 10% single screens may not reopen. But we'll have to wait and see. Once cinemas are permitted to reopen and once all states start opening cinemas, only then there'll be validation of this number. But at this point where we stand looks like 10% of single screens may not reopen. Nitin, over to you.
Yes. So Abneesh, on your second question about how we see growth panning out in the next 3 to 4 years, as we all come out of this pandemic, there will be very few operators who will be left with enough capital to spend on growth. The smaller guys will be struggling to bounce back and revive operations. So what we expect really, I think, will be the bulk of the growth that is happening in the Indian multiplex industry will further get consolidated amongst the big players.You may also see opportunities in the near term as we come out of the pandemic that smaller players, who are finding it tough to survive and operate, may also eventually want to consolidate with larger operators. So our sense is that in next 2, 3 years, bulk of the screen additions will move away from smaller operators to larger operators, who have the capital and the balance sheet to build out new screens and sustain growth over the long term.
So 1 follow-up to that, and this is my last question. So you said 10% of the single screen potentially couldn't come back based on your ballpark assumption. So that's almost 500 to 600 screens. So my question is, in terms of replacement, how does it work normally pre-COVID also, does a multiplex or a new cater replace that single screen or it just vanishes out of the market and customers move on to whatever is available?
Abneesh, can I just answer? I mean we are in a -- I mean, India, even prepandemic, and let's talk about normal years. It's in a transitionary phase where an old format was, in any case, because of 1,000 seats, it is different -- we've also -- we've been running single screens for a long time. I've personally been running a single screen also. A 1,000 seats to fill up day-in and day-out for 52 weeks is not very easy. And therefore, a lot of single screens are becoming unattractive to run for even prepandemic because you don't get 52 weeks of blockbusters, number one.Number two is that government, most of the places in India, has already given permission to convert to -- the mom-and-pop or pop-and-son, property holders of the single screen to convert them into a very small commercial outlets of 30,000, 40,000 square feet, while retaining 300 seats or 10% of the seating -- 30% of their seating capacity.So that is a very attractive proposition also for a lot of people regardless of how just holding this real estate, restricting it to single screen only. So this has just exacerbated the whole issue, the prepandemic -- the pandemic that people are trying to capitalize on the real estate value rather than just running it as a single screen. Now even if it does close down, you still have 1 screen of, say, roughly 300 seats.Now the other format, which is the new format, multiplexes, that is -- the growth of that has not -- got nothing to do with the single screen closing down or opening up. That's a mall-driven, shopping center-driven growth. So wherever real estate developers are going to be announcing these destinations where retail is happening, multiplexes can come in over there and that growth will be driven by that, typically 4 to 5 screen complexes with 1,000 to 1,500 seats. So I think one has got nothing to do with the other. If I -- if that answers your question?
So I understand the mall concept, but ultimately, it is about consumer demand. So how does it get met when the screens shuts down. I understood that the seating capacity reduces by 2/3 from 1,000 to 300, but my question is any...
Demand gets met by new shopping centers, which are opening up, right, by new multiplexes, which will open and shopping centers. So the supply comes from new shopping centers. So if 1 single screen with 1,000 seats gets shut, you can have, even in a smaller town, a multiplex opening up with 4 screens with 1,100 to 1,200 seats. So that supply meets the new -- that demand.
Abneesh, which screens are unlikely to get converted into multiplexes, is that your question...
Yes, yes, yes. That doesn't happen. Those multiplex -- the single screen will not get converted into a multiplex.
Abneesh, if I could summarize, Mr. Bijli has given a very comprehensive answer. Even prepandemic this whole practice of single screen shutting down either converting into a full-fledged commercial complex or turning into a smaller single screen with the balanced real estate being utilized for some other purpose, this phenomena was existing even before pandemic struck the industry.And we were losing about 250 to about 300 single screens every year. Some of these, I would say, about 100, 150 single screens were converting into smaller single screens and about 100, 150 were going off the exhibition charts totally, and they were being compensated by the new built multiplexes screens, which were mushrooming all over the country.Now the point that I think we should focus on is that this year and maybe to some extent next year could be a small aberration where slightly more number of single screens could shut down, but the demand of these single screens will get diverted to the multiplexes because it's very difficult to find any city or town, which has a single screen, to be without a multiplex. Almost entire country, the addressable market that we have, all the cities and towns, wherever you have single screens, there are also multiplexes. So in case a single screen is to shut down totally, that demand is likely to get transferred to the multiplex, which is there in that town or the city.
[Operator Instructions] The next question comes from Akshat Jain from Paragon Partners.
Sir, I have a question on the cost side. So 2 questions from my side. So firstly, so how much is the monthly cash burn that we have currently? And secondly, what is the -- how are we on the negotiations front with the landlords on rent and CAM waivers? And is there any permanent reduction in fixed cost that is sustainable?
Nitin, do you want to take that?
Yes. I'll take this question. Your first question was around the cash burn. See, in this situation, it's very difficult to comment on a specific amount of cash burn simply because a large part of our fixed cost is our real estate-related costs, which is rent and CAM that we pay to property developers. Most of our negotiations for rent and CAM concessions that we had negotiated with our landlord partners were till 31 March of last year as everyone was expecting business to bounce back.Unfortunately, as the second wave of COVID has hit and shopping centers, malls and cinemas are shut all over the country, we have begun these landlord discussions once again. But we are -- and we are reasonably confident of getting a large relief from them as some of these discussions evolve. But given that nobody has clarity on the opening time lines around shopping centers, malls, et cetera, we clearly have no specific visibility on how much will be the cash burn or how much will be our outgo on that front.And given that it's very difficult to give any specific number of what our monthly cash burn would be, I guess once our negotiations conclude, we'll be able to give a specific number. All I can say is all other fixed cost structures continue to be operating. We've again taken all the specific measures that we took last year to reduce our other fixed costs. And we continue to operate at a significantly lower cost. But as we have more clarity around these settlements, we'll be able to give a specific number of cash burn. Your second question -- sorry, could you repeat your second question?
My second question was that -- I think it was on the permanent reduction in fixed cost, which -- is that sustainable? Or it's going to bounce back once things go back to normal?
Yes. So we had given a guidance on that front in our previous quarter conference call as well that leaving aside our occupancy costs, all other fixed costs of the business, including people costs and other overheads, we expect to have a long-term reduction of anything between 10% to 15%. What that specific number will look like is slightly difficult to comment till the time the business reopens fully. But we do expect more than 10% saving in other fixed costs.
The next question comes from Mr. Jinesh Joshi from Prabhudas Lilladher.
Yes. Sir, I just have 1 broad-based question on competition. So given the current situation we are in, I mean, is it possible to give some color on how the other 2 unlisted chains are doing, especially on the cost and the liquidity management side? Now I know it might be difficult to quantify much, but even some qualitative insight can help us.
Yes. Unfortunately, we are not privy to that information on how some of these unlisted chains are doing. But clearly, with limited access to capital, I think it's a challenging situation for most of the unlisted smaller multiplex chains. Wherever promoters have money from their other businesses to support the cinemas, they are getting that support. But wherever that support is not possible, the respective chain cinemas are all going through a tough time.So like us, I think most of these unlisted chains have also taken massive cost cutting measures. I think full clarity on how they will emerge out of the pandemic and how each chain will operate will only emerge once cinemas reopen in full and the Hindi film industry starts operations with new film releases.
Sure, sir. But is it fair to assume that these unlisted chains are doing significantly better than the single-screen operators? Is that a fair assumption?
No. Everyone is in a different situation. It's difficult to -- because when we answered the earlier questions, also some single-screen people, owners are happy with having a real estate -- a prime real estate area of 30,000, 40,000 square feet, and they have alternative use to it, so they would be in a good position. Some people who've leased the single screen may not be doing well.Similarly, smaller screens operators could be doing okay, some could not be, but generally -- overall generally, it is not a hidden fact that the industry has got impacted by the pandemic. It's one of the hardest hit industry along with hospitality sector and leisure and out-of-home. So -- but it's just, okay, fine, who's injured more, who has got hit more is hard to tell.
Sure, sir. Sir, just 1 last bit. With respect to the Bollywood content pipeline that you have shared in the presentation, is it possible to convey how many movies from that list are complete and can hit the screens once multiplexes open? I'm not looking out for an exact count, but even some rough approximation will do over here.
Yes. I mean I'll ask Kamal to answer that, but I just want to tell you that the way PVR is spread out, PVR's regional presence in North, South, West and East is less, but our South presence is pretty significant. So when we look at our lineup, we look at everything, not just specifically Bollywood, which also got proved when we released -- when there was a small window when we opened that even the South Indian films that came, like Master and all, did very well. So we look at the overall portfolio of films, pipeline of movies, not just Bollywood, but specifically for you, Kamal, if you can just give a little flavor? There were a lot of movie ready anyway, like Sooryavanshi, 83, but difficult to put a number on how many movies. Kamal, would you like to hazard a guess or give a little guidance to that?
Sure, sure. Thanks, Mr. Bijli. A lot of films are ready because you would recall, in March 2021, when cinemas were still open and the second wave was still to take a -- was still to gain momentum, there was a slew of releases, which got announced for the entire year. And there was almost a land grabbing sort of a situation, which was taking place for the holiday weekends.So the entire financial year '21-'22, all big weekends, out of the total 52 weekends, were totally grabbed by not just Hindi films, but also Hollywood films and Tamil, Telugu and other regional films. So short answer to your question is a lot of films are ready. In fact, we are in constant with the producers, not just Hindi producers, but also regional producers.And of course, there is a lot of action now happening as far as the Hollywood films are concerned, they started releasing this summer in U.S., has already commenced. A lot of films are getting released. So those will also be ready to release as soon as we reopen. In fact, we feel there would be a lot of anxiety amongst producers to grab the release lots because Hollywood will have a lot of films, which will be ready for release. Hindi has got quite a few films, which are ready for release, which have been waiting because of these endless delays. So answer to your question is that a lot of films will be ready. And in fact, there would be competition amongst producers to grab the good weekends. If you need specific numbers, my colleague, Rahul Gautam, would be able to share it with you offline.
The next question comes from Mr. Arun Prasath from Spark Capital.
So you spoke about growth opportunities a short while, so can you give more specific color on how many new properties are probably in design or in an early stage, where, say, location is finalized or LOIs or MOUs with developers are already in place? Some kind of numbers would be helpful.
Yes, I'll take this question. So we have a very large pipeline of screens before we hit the pandemic, which are ready for handover and which are likely to come up in the next few years. But in view of the pandemic, we have currently suspended taking handover of any new sites. We've currently suspended all new CapEx to fit out new screens. We currently have approximately 19 screens, which are absolutely ready to open, which we will open as soon as we get an opportunity.But I think our decision to recommence our CapEx program is awaiting how soon do we come back to normalcy. But the screen number is quite large. I don't want to give a specific number. But we have a very large pipeline of screens, which is awaiting handover, where we can potentially start work immediately once we see the business coming back to normal.
No. I was not talking about the handover screens, but more like where LOIs or the developers agreement is in place with developers.
We don't share that data on what that number is, but we have a fairly large pipeline of screens.
All right. Fair enough. My second question is on the convenience deal. You had a convenience deal with third-party aggregators, so it's halfway through, and we had a pandemic. So any update on the renewal rate or extension of such contracts?
No, it's very premature to talk about renewal dates. The business has largely been shut during the course of the last 12, 15 months. And we've extended some of these deals during the period we've been really shut and given that incremental time frame. So we still have a residual period. We are midway through the contract. So there is still a lot of work that we need to complete once we reopen before those contracts come up for any renegotiation.
So ideally, when it will be coming up for renewal? Suppose, if you are opening, say, from 3 months -- from now, so from there, when it will be -- how many months it will take to reach the renewal stage? Any color on that?
I don't have the specific months, but I think we are midway during the contract. We had a 3-year contract. We are somewhere midway during those contracts. So we are still 40% to 50% of those contracts yet to expire.
Okay. One bookkeeping question. Any future -- in the future, what would be the tax rate -- ideal tax rate now that you have this goodwill accounting also? Any impact on that future tax rate? Would it be lower? Any color on that?
No. So as I said, we are continue to operate in the old tax regime, which was 35% tax rate regime simply because we have brought forward MAT credit. Our tax -- outflow today on tax front is on MAT basis. We will switch over to the new regime of tax, which is a 25% tax regime, as soon as we exhaust our brought-forward losses and existing MAT credits, which I think will take at least another 2 to 3 years to happen depending upon how the business comes back. But our tax rate then effectively from the existing regime where we are paying MAT, we will shift to the new tax regime where we'll be liable to 25% tax.
The next question comes from Harit Kapoor from Investec.
I just had 2 questions. Firstly, if you could just help us understand, you have about INR 1,300 crores-odd of gross debt. Any major repayments coming off in the next, say, 6 to 12 months that you wouldn't be refinancing that you can help us with?
Rahul, do you want to take that?
Sure. Harit, so I think we have about INR 1,300 crores of total debt and a bulk of this is more long term in nature -- sorry about this. Yes, sorry about this. So this long-term loans are fairly spread out over the next 4 to 5 years. So on an average, our repayments are....
Hello?
Sir, I'm sorry. Dear participants, please stay connected, while we connect back the chairperson. [Operator Instructions] Welcome back, sir, your in the conference. Please go ahead.
Sorry, I got disconnected. So I was saying this is -- the repayment of long-term debt is fairly well spread out over the next 4 to 5 years with an average repayment of between INR 200 crores to INR 300 crores a year.
Okay. So that's the number that we can expect even in the current year that you talk about these numbers?
That is correct. That is correct. That is correct. So I think you had a question on refinancing, what we will do about this? I think we keep on a sort of on a regular basis keep on update on how the liquidity position is. And depending on credit markets decide whether they want to refinance it or just pay from our cash flow, so we'll take a call as and when they come up for repayments.
Got it. Got it. And the second question was on the CAM TAM and rent reduction in quarter 4. So obviously, rent is down almost 50%. CAM is down about 23-odd percent, so were these -- while we were negotiating with landlords and malls and developers, were these the kind of negotiations that your rents -- absolute rent numbers would come down more, but CAM you would not cut down to that extent? Or do we -- does this imply that with developers, the rates negotiated were a bit better -- or were a bit lesser compared to the stand-alone landlords?
So I'll just answer to this question by saying that each of our negotiations is different and independent with each developer. And what you see is a portfolio of what we have managed to negotiate. CAM expenses are actual expenses incurred by shopping mall developers in running and operating a shopping mall. While I think they have reduced these expenses to the extent they can, but they are not dependent on occupancy, and these are actual costs, which have to be borne by all the existing operators or tenants of the mall. So yes, there is less flexibility in negotiating those costs down because these are typically pass-through costs. And rental is where the big focus has been, and we've managed to get some good discounts during the period that we were shut.
The next question comes from Urmil Shah from IDBI Capital.
Hope, you guys are safe. Sir, my first question was on the content lineup and more for -- from FY '23 and '24 point of view. So as we are expecting that the weaker players in the multiplex industry might find it difficult to continue, movie production is also equally fragmented, if not more. So are you seeing on the ground any shakeout of smaller producers and which can impact the content lineup for FY '23 or '24?
So first point is that the producers -- the nature of production business is that they're used to gaps. So -- because as you rightly mentioned, Indian market is quite fragmented as compared to the developed market. Each producer produces 1, maximum 2 and only in some cases, 3 films a year, which means they're used to a gap between 2 releases. So to that end, this whole pandemic-induced gap that producers are suffering is longer than usual, but it's not something which they're not used to.Number 2 is that our conversations with producers and talent agencies that we are having, the feedback that we're getting is that, in fact, producers have utilized this phase quite wisely. And a lot of films, a lot of creative material has been put together, a lot of films have been greenlit, a lot of sessions have taken place with the actors, where actors have given their buy-in for the project. So I mean, the whole development work, it seems this whole time was utilized very wisely for creating material and taking buy-in from the creative talent. So to that extent, it seems the whole machine is working at the same pace, although in a different format. So there is more development, less shooting, but the work is going on. The third good news is that the -- good news, when I say in -- only in the context of the question that you're asking with respect to content supply, is that the actors' fee has not gone down single bit, which clearly shows that the demand for established actors, actresses has not diminished at all. There is no reduction in quantity of films, there is no reduction in the work that the established actors were doing or will continue to do in future. So when you put all these factors together and when you look at the slate that has been shared with us from the producers, we see absolutely no flatness as far as production is concerned in the years to come.
Kamal, sir, that was helpful. Just 1 part. More from a capital availability point of view for smaller guys, I mean, for a movie, they would have put in the entire capital. And currently, as you said, the gap between 2 movies is getting elongated. So from a difficulty of having the capital point of view, from that perspective, also, you are not seeing any risk on content for '23-'24?
The producers have been fortunate to the extent that the streaming platforms have been big customers of their content. So a lot of producers have, in fact, benefited because there was a mismatch in year 2020 in terms of demand and supply. So the films which were available, which were ready, in fact, got sold off at good prices is what we are learning now. So a lot of producers have, in fact, benefited in terms of cash flow from the last 12, 13 months.
Sure. Sir, next was on the growth for '23-'24. So from your commentary, it appears that if things stabilize by the end of FY '22, both the capacity addition and the growth can actually see a pent-up in FY '23-'24. So is that understanding right that we might -- either through organic or inorganic, the capacity addition can actually be quite strong?
So I would refrain from making any forward-looking statements. I would only say that the quarter 3 and quarter 4 of this financial year will see a lot of supply of content because they've all got bundled up and producers are very anxious to catch release slots. So you would see a tremendous amount of supply once cinemas reopen and once there is widespread vaccination and once the customer sentiment also improves. So you will see a lot of supply of content for the next 6 months after cinemas reopen. And then thereafter, it starts stabilizing, but at no point we see content supply in terms of quality or in terms of quantity going below the 2019-'20 level as we move forward in the subsequent financial years.
Urmil, your question was on capacity addition, is it clear?
Yes, Rahul, sir. Actually, it was on capacity addition.
Yes. Nitin, do you want to take that? I think you answered till the part of the call, but maybe you can just speak this again? Nitin?
Yes. So as I said, it's very difficult to give a specific guidance on this, but we will recommence our CapEx programs once business comes back to normal. And if the business bounces back, so will the screen growth also bounce back. But what that quantum will be, how many screens will open, I think it's very early for us to give any kind of forward-looking guidance. I guess, as the year progresses, we'll be in a better position to comment on the sale.
The next question comes from Mr. Depesh Kashyap from Equirus Securities.
I have just one. Sir, many South Indian films did fairly well in the last quarter, considering which you reported box office revenue seems to be on the lower side. So just wanted to understand, based on our internal assessment, what has been the market share of PVR in the South market? And did you see that coming down in 4Q mainly to single-screen players, please?
Nitin, do you want to take this?
Yes. So -- and Kamal, you can add on to this. South Indian movie releases began in January onwards with the release of Master, and most of the industry was still continuing to operate with capacity constraints. We were operating on a 50% seating capacity restriction until mid to end February when this capacity caps were relaxed, and we saw more film releases. And the performance of South Indian films was quite good, and we see a big bounce back. In fact, if you look at our numbers, bulk of the admissions are contributed by South Indian films. We saw that in the later months when the capacity caps were relaxed, the South Indian bounce -- we were almost doing 50%, 60% levels of admissions of what we were doing in pre-COVID films were opening to big numbers.And I don't think there has been any kind of a market share loss, specifically. We quickly released ticket pricing levels, which were -- which we were operating at pre-COVID levels. And also our average F&B spends in cinemas were also close to what we were operating at a pre-COVID levels. Kamal, can you comment specifically on this market share question?
So 2 points. PVR's -- within PVR's box office revenues, the contribution of South India is almost 35%, 36%. Our market share, in fact, in January till March 2020 period, it became better than what it used to be earlier, although overall numbers were small because there were fewer films which were coming out. But PVR's contribution and market share actually grew in this period. So I'm not sure what data are you referring, but the way we look at the data, our market share has actually grown in this period.
Next question is from Yogesh Kirve from B&K Securities.
So looking back a bit, so when this COVID-related disruption started, so in U.S., we saw several of deals between the film exhibitors and the distributors with shorter releasing though there were also quite a few simultaneous release as well. So my question is why something of this sort has not happened in India so far? Does this reflect our comfort, there's not many movies that are going to see theatrical release. So does that reflect this?And related to this, now that we are in the 15th or -- almost 15th, 16th month of COVID-related disruption, do you believe that we need to be a little accommodative at least from a shorter term perspective in terms of the various terms of business, such as theatrical windows of the revenue share, or the old sort of implement success plan for the multiplex industry?
So what I've understood your question, the first part of your question is that in U.S. and the other western market, there was a reduction in window, but the same did not happen in India. Is that the question?
Yes. Yes.
Well, I mean, you're right. I mean, U.S. market and other developed markets have gone through dramatic reduction in windows, and the market has also seen a lot of turmoil in terms of producers launching their own direct -- streaming direct-to-customer apps, and of course, because these studios were conflicted and they wanted to service their direct customer apps, a lot of things released directly on streaming platforms.India has been -- India has also seen some bit of that in 2020. But as compared to Western markets, we've been fairly insulated. And I think one reason for that is that there is no -- India is not a homogenous market like U.S. So there is no single dependence on one type of films. So we depend on Hollywood films; we depend on Hindi film industry; then within regional, there are 3 or 4 very big industries like Tamil, Telugu, Kannad, Malayalam, and then there are smaller industries like Bengali, Punjabi, Gujarathi and many others.So because the market is fragmented in terms of languages, also within languages, we don't have consolidation, we don't have studios operating like the way you have in the western market. So as a result, an exhibition is much more consolidated. We are -- PVR is a fairly large player. Our colleagues in business are also fairly large in terms of scale and size. So exhibitors tend to have a more long-term perspective on these matters, and we've been able to negotiate harder as compared to our colleagues in the developed market. So that, in our opinion, is one reason, but of course, there are many other variables at play.But I mean, the second question, whether Indian market will be more accommodative and would be relaxed windows, see, we -- as an important stakeholder in the entire value chain, we want to find solutions which are sustainable and which benefit all members of the value chain. At this point, it's important that the industry recovers and it recovers quickly.Fortunately, what we are seeing in the U.S. market, China market and other markets, which have been able to contain COVID, the recovery seems to be faster than expected. So we want to follow the same trajectory, and we would be accommodative, and we would do everything possible to ensure that producers have a comfortable time releasing their films, and they're encouraged to come forward and release their films quickly. So that's the answer to your second question.
Okay. Quite helpful. My second question is to Nitin. I understand the negotiations with the landlord will take time or not yet, please. So can we accept the other overheads, I mean, would we able to achieve the peak savings that we achieved during the last year. So at least on the noncurrent related fixed costs, we could replicate the savings?
Yes. We are following the same practice. I think we must also remember, though, that we had restarted our operations and all our cinemas, we had, again, once again reopened. And we were operating some of the properties till second or third week of April. So shutdown has happened consequent to that.But again, like we implemented cost savings and cost control measures, last year, same factors, same -- has been reinitiated once again. What that specific number would be? It's very difficult to comment right now. I think we'll be in a better position as we close the quarter.But yes, all of that has been reinitiated, and we are following exactly the same practice as what we did last year. But we have to remember that cinemas are open for some parts of April. And once we shut down, there is some bit of a lag effect to cut down some expenses.
The next question comes from Harit Kapoor from Investec.
Yes. My questions have been answered. Thanks.
The next question comes from Girish Pai from Nirmal Bang.
My questions, first one is regarding advertising revenue. Do you see a quick bounce back of your advertising revenue? What are your customers saying once, say, you have a bit of normalcy in the third quarter -- expected normally in the third and fourth quarter, do you see advertising revenues come back equally quickly? Or do you think it's going to happen with a lag? And second point connected with that, do you think you need to give some kind of discounted rates to begin with?
So, no, we won't need to give any discounted rates. In fact, we're very clear. We are -- we will have the same rates operational. We don't want to sort of start a new norm in the market. But to answer your first question, yes, it will be a bit of a slow burn initially. Advertising always follows footfalls. And more so, we will need at least a couple of big blockbuster films to get this entire wheel started.So our guess is that once we open and once we get a couple of big films, we will see advertising slowly but surely coming back on track. We saw the similar pattern for the South Indian films that it took some time, but the moment Master came in, we recorded some great advertising revenues there in the south. We see the same pattern swelling up as and when we open, and then the release of some big films.
My second question is with regard to support from the government side, they've been quite a few noises made around supporting contact-intensive services sectors. Any discussion along those lines you've had with the government? Are you expecting anything coming your way?
Nitin, could you...
Yes. So -- yes. I'll take this question. So we had been lobbying with the government to include -- extend some kind of a relief to the industry, given that we have been significantly impacted. Our lobbying has been at a state government level because some of these costs are controlled and managed at a state government level, like we've asked for concessions in electricity duties and taxes, concessions in property taxes which is, again, a state government issue.And at the central government, we've asked for some bit of liquidity support in GST relief. The government had come out with a ECLGS scheme, which basically to support the sectors which are impacted by pandemic. Under the ECLGS Scheme 3 and the recent amendment that the government has announced this weekend, they have allowed businesses in sectors, like hospitality, which are hit by the pandemic, to get liquidity support.And basically, the scheme says that any companies which have borrowings in excess of INR 500 crores, you can apply under the program, and you can potentially get funding -- a 6-year funding from various banking partners, which is equal to about INR 200 crores, so 40% of the INR 500 crore limit, which they had earlier imposed.So we can raise another INR 200 crores of additional liquidity from banking partners under the ECLGS scheme, which has recently been amended and announced by the government on Monday. We've already taken discussions with our banking partners on the same. And we expect that we will get more liquidity support to tide over this pandemic. So that's the only relief that has come through as of now.
Lastly, on your pipeline of screens, do you think some of your real estate partners would have been under some amount of stress and those screens will actually not come up over the next 3 to 5 years because of them being weaker or whatever?
Pramod, would you take that?
Yes. So we don't anticipate much of a fall. So the process was diligently followed wherein we usually look at the financial closures of developers when we are signing the agreement. Nonetheless, about 10%, maybe a possible windfall or the screens which may drop down, but not beyond that. That's how we are looking at it as of now.
Thank you, sir. That would be the last question for the day. Now I hand over the floor to Mr. Nitin for closing comments.
Yes. Thank you, everyone, for taking out time to attend our Q4 earnings call. In case, we have not been able to answer anyone on this call, you can write to me or my colleague, Rahul Gautam directly, and we shall be happy to speak to you and address your queries offline. Thanks very much, once again.
Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. Thank you for your participation and for using Door Sabha's Conference Call service. You may all disconnect your lines now. Thank you, and have a pleasant evening.