Keeping Silver Screen Alive

Manoeuvring PVR through the most difficult two years faced by the cinema exhibition industry was perhaps Nitin Sood’s most challenging assignment in his 21 years long association with the multiplex giant. At a time when this industry was at almost zero revenue, and the business had high fixed costs, Sood went to the drawing board and reworked all aspects of costs.

PVR’s fixed costs which stood at Rs 1,714 crore in FY20, were brought down to Rs 636 crore in FY21. In FY22, the company saved 37 per cent in fixed costs, standing at Rs 1,078 crore. Among the key areas through which this reduction was achieved included negotiating discounts on rental and common area maintenance, temporary compensation reduction at various company levels, downsizing the workforce to preserve liquidity and renegotiating housekeeping and security contracts.

Under Sood’s leadership, the company also worked closely with their suppliers and vendors to negotiate alternative payment schedules for their creditors’ outstanding amounts. They also went down aggressively on their debtors to make their working capital more efficient and preserve liquidity. 

With Sood at the helm of affairs at the height of the pandemic, PVR raised Rs 300 crore from existing shareholders through a Rights Issue. It then went on to raise Rs 800 crore from investors through QIP in January 2021. To meet its financial commitments during the two years of the pandemic, the company raised more than Rs 1000 crore through long-term facilities/NCDs/ working capital loans.

Sood also led the PVR-Inox merger, which puts the combined entity at par with global giants in terms of the number of screens and annual admissions. 

Sood believes that the line between a CFO and CEO’s office is fast diminishing, as they are playing a very active role in supporting the CEO in driving the business. “They are evolving into strategic leaders who help to translate some of the visions into numbers and allow the board and the CEO office to think through the impact of some of their decisions and how to think about capital budgeting, apart from just being a traditional accounting and compliance role,” says Sood.  

Sood says the government increasing its allocation to capital expenditure in this year’s budget is a big positive which would drive up private consumption. “While there may be a bit of slowdown in the near term, a lot of consumption sectors like ours will see a strong revival,” he reckons.

Sood says that they are aggressively adding capacity and believes that private investment revival in India is going to happen and will take off on the back of government spending.