As India’s largest multiplex chain recalibrates its expansion strategy, PVR INOX is increasingly straddling two worlds—deepening its footprint in urban micro-markets while unlocking demand in Tier II cities through an asset-light franchise model.

In a conversation with Fortune India, Sanjeev Kumar Bijli, Executive Director, PVR INOX Ltd., breaks down the company’s evolving playbook, the economics of the exhibition business, and why he remains bullish on the theatrical experience.

How is PVR INOX strengthening its Delhi footprint through the DLF Midtown launch?

For PVR INOX, Delhi is not just another market—it is a core consumption hub. The new three-screen multiplex at DLF Midtown Plaza in Moti Nagar reflects a sharper strategy of building density within high-potential neighbourhoods rather than merely expanding footprint.

Bijli explains that cinema consumption in India remains deeply local. “If a theatre is not accessible within your immediate catchment, frequency drops significantly,” he says. The Moti Nagar property, located amid affluent residential clusters such as Punjabi Bagh and Rajouri Garden, is designed to cater to over 15,000 families as a convenient neighbourhood entertainment destination.

What distinguishes this expansion is its positioning. The company is no longer viewing cinemas as standalone venues but as social and cultural anchors. Lounge-style lobbies, gourmet food offerings, and hospitality-led design elements are meant to encourage longer dwell times and repeat visits.

“Today’s audience is looking for more than just a film—they want an experience that blends comfort, community, and aspiration,” Bijli says.

What role do urban expansions play in PVR INOX’s long-term growth strategy?

Urban markets, he notes, will continue to be critical—but the strategy has evolved. Instead of large, destination-led multiplexes, the focus is now on micro-market penetration.

This approach serves two purposes. First, it increases accessibility and frequency of visits. Second, it helps PVR INOX tap into established consumption patterns in high-income neighbourhoods without overextending capital.

“We are building where the demand already exists and enhancing it with better experiences,” Bijli says, adding that such targeted expansions are central to the company’s sustainable growth strategy.

What strategic opportunity does PVR INOX see in Tier II markets with its entry into Agra?

If metros are about density, Tier II markets are about unlocking aspiration.

PVR INOX’s entry into Agra with a four-screen multiplex under the FOCO (Franchise-Owned, Company-Operated) model marks a significant step in this direction. FOCO is a hybrid franchise model in which the franchisee invests in setting up the store, while the franchisor retains control over and handles its day-to-day operations. The property introduces premium formats—laser projection, immersive sound, recliners, and café-style spaces—to a city that has historically lacked high-end cinema infrastructure.

Bijli sees this as a structural opportunity. “India is under-screened, but more importantly, many markets are under-served in terms of quality,” he says.

The demand profile in such cities differs subtly from metros. There is a strong novelty factor attached to premium formats, and cinemas often function as key social hubs. At the same time, cities like Agra offer an additional lever—tourism.

“With millions of visitors coming in every year, a premium cinema can extend the city’s evening economy and create new consumption occasions,” he adds.

What criteria does PVR INOX use when selecting franchise partners in emerging markets?

The FOCO model is central to PVR INOX’s expansion in emerging markets. It allows the company to scale up its screen count without significantly increasing its capital expenditure.

Under this model, franchise partners are responsible for funding and developing the property, while PVR INOX handles operations, programming, technology, and customer experience.

But capital alone is not enough. “We look for partners who understand the local market, have strong real estate capabilities, and share our commitment to quality,” Bijli says.

Local partners bring critical insights into catchment dynamics and consumer behaviour, reducing execution risks in new markets. At the same time, PVR INOX ensures that brand standards remain uniform across locations.

“The consumer experience cannot vary. Whether it’s technology, service, or food and beverage, everything has to be consistent,” he emphasises.

How are responsibilities divided under the FOCO model?

The FOCO model is central to PVR INOX’s expansion in emerging markets. It allows the company to scale up its screen count without significantly increasing its capital expenditure.

Under this model, franchise partners are responsible for funding and developing the property, while PVR INOX handles operations, programming, technology, and customer experience.

But capital alone is not enough. “We look for partners who understand the local market, have strong real estate capabilities, and share our commitment to quality,” Bijli says.

Local partners bring critical insights into catchment dynamics and consumer behaviour, reducing execution risks in new markets. At the same time, PVR INOX ensures that brand standards remain uniform across locations.

“The consumer experience cannot vary. Whether it’s technology, service, or food and beverage, everything has to be consistent,” he emphasises.

What ensures consistent experience and service standards across properties?

Consistency across owned and franchise-led properties is achieved through a combination of standardisation and automation.

PVR INOX has invested heavily in technology to streamline both customer-facing and backend processes. Digital ticketing, automated systems, and standardised operating protocols ensure efficiency without compromising service quality.

At the same time, the company has undertaken a rigorous cost optimisation exercise post-COVID, focusing on reducing fixed costs while maintaining service standards—a critical move in a business with high operating leverage.

What are the early box office trends for ‘Dhurandhar: The Revenge’?

On the content front, Bijli points to the performance of Dhurandhar: The Revenge as a strong indicator of the industry’s recovery. The film has already crossed ₹1000 crore globally at the box office.

“For a good film, price is not a constraint,” he says. “We are seeing audiences come back multiple times, which is a very encouraging trend.”

India’s box office collections have already surpassed pre-pandemic levels, both for PVR INOX and the broader industry. While occupancy per screen is still below 2019 levels, it is steadily improving year after year.

Looking ahead, Bijli expects momentum to build further, with a strong pipeline of releases likely to make the next financial year one of the biggest in the industry’s history.

How does the cinema business make money?

Despite the headline box office numbers, the economics of the exhibition business tell a different story.

“At a broad level, about 60% of revenue comes from ticket sales, 30% from food and beverages, and 10% from advertising,” Bijli explains. However, the bulk of profitability—nearly 80%—comes from concessions and advertising, not ticket sales.

Films act as the primary driver of footfalls, but it is the ancillary revenue streams that sustain profitability. This interplay between content, concessions, and advertising is fundamental to the business model. 

What lies ahead for PVR INOX?

India remains significantly under-screened, with just 6–7 screens per million people—far below global benchmarks.

For PVR INOX, this represents a long runway for growth. The company’s strategy—combining urban densification with franchise-led expansion in smaller cities—is aimed at bridging this gap while maintaining financial discipline.

“Cinema-going is still a habit in India. It has not become just an event,” Bijli says. “If we continue to deliver good content, maintain quality, and expand access, the growth will follow.”

In an evolving entertainment landscape, PVR INOX is betting that the big screen still holds its magic—provided it meets audiences where they are, both geographically and experientially.