Connplex Cinemas: Scripting a Blockbuster Growth Story in H1 FY26

Connplex Cinemas Limited, a rising star in India's entertainment sector, has delivered a compelling performance in the first half of fiscal year 2026, marking its debut as a listed entity with robust financial and operational growth. The company, known for transforming the cinema experience across India, reported a significant 57% year-on-year increase in revenue, reaching INR 64.06 crore. This impressive top-line growth was complemented by a 39% rise in EBITDA to INR 17.86 crore and a 36% surge in Profit After Tax (PAT) to INR 13.05 crore. These figures underscore Connplex's strong operational execution and strategic expansion initiatives, even as it navigated a dynamic market landscape.

The company's revenue streams are notably diversified, reflecting its multi-faceted business model. A substantial portion of the H1 FY26 revenue, approximately 46.59%, came from cinema construction and franchise fees, totaling INR 29.85 crore. Movie exhibition, primarily ticket sales, contributed 39.03% or INR 25.00 crore. Food and Beverages (F&B) revenue share accounted for 4.68% (INR 3.00 crore), while advertising income added 1.75% (INR 1.12 crore). Other revenue-sharing income, including private events and convenience fees, also contributed 1.75% (INR 1.12 crore). Additionally, Virtual Print Fee (VPF) income generated 2.65% (INR 1.70 crore), with miscellaneous income making up the remaining 3.54% (INR 2.27 crore). This balanced revenue mix highlights Connplex's ability to monetize various aspects of the cinema value chain, reducing reliance on single income sources.

| Financial Metric (H1 FY26) | Value (INR Crore) | |----------------------------|-------------------|| | Revenue from Operations | 64.06 | | EBITDA | 17.86 | | PAT | 13.05 | | EBITDA Margin | 27.87% | | PAT Margin | 20.38% |

Strategic Expansion and Operational Excellence

Connplex's growth narrative is deeply rooted in its asset-light franchise model, which has been instrumental in its rapid market penetration. This model minimizes capital expenditure while enabling swift expansion through partnerships with local entrepreneurs, investors, and real estate developers. The company currently boasts 31 operational cinemas, comprising 83 screens and 6,831 seats, spread across nine states in India. The management highlighted that 17 new screens became operational in H1 FY26, with another 16 ready and awaiting licensing, demonstrating consistent progress towards its ambitious expansion targets.

A key differentiator for Connplex is its strategic focus on underserved markets, particularly Tier 2, Tier 3, and Tier 4 cities. These regions offer lower rental costs, strong performance potential, and a healthy spending capacity, making them fertile ground for growth. By tailoring its cinema models—Express, Signature, and Luxuriance—to meet diverse audience needs, Connplex ensures a premium movie-going experience with high-grade recliner seating, advanced sound systems, and high-definition projection technology. This customer-centric approach, combined with efficient and cost-optimized operations, allows the company to achieve quicker break-even points and strong profitability.

Navigating Margins and Future Outlook

While the company celebrated robust top-line and bottom-line growth, the EBITDA margin saw a slight decline from 31.53% in H1 FY25 to 27.87% in H1 FY26, and PAT margin also decreased from 23.61% to 20.38%. Management attributed this to a changing revenue mix, with a higher proportion of cinema construction income, which can have different margin profiles compared to operational income from ticket sales and F&B. Additionally, increased operational and expansion-related costs contributed to the margin compression. The company also acknowledged an increase in receivable days, from 25 days in FY24 to 60 days in H1 FY26, primarily due to the expansion phase and payment cycles for cinema construction projects.

Despite these margin dynamics, the management expressed confidence in the sustainability of its margins, expecting fluctuations to remain within a narrow 3-4% range. They also highlighted proactive measures, such as renegotiating projector prices post-IPO for bulk purchases and implementing central procurement for cost-effectiveness. Looking ahead, Connplex plans to add 60-70 screens in FY26 and another 60-75 screens in FY27, with a long-term vision of operating around 1,000 screens by 2030. The company anticipates continued growth from its diversified revenue streams, including a significant increase in royalty income as the operational screen count grows.

A Vision for Sustainable Growth

Connplex Cinemas Limited is not merely expanding its footprint; it is strategically building a sustainable business model that leverages India's vast, underpenetrated cinema market. By focusing on Tier 2 and Tier 3 cities, offering premium experiences, and diversifying its revenue streams, the company is well-positioned to capitalize on the growing demand for out-of-home entertainment. The management's transparent communication regarding margin fluctuations and working capital investments, coupled with its clear growth roadmap, instills confidence in its disciplined capital allocation and long-term vision. As Connplex continues to add screens and enhance its offerings, it aims to solidify its position as a leading player in India's evolving entertainment industry, promising a compelling growth story for investors.