PVR INOX FY26: Record revenue, cash flow surge, and a capital-light expansion pivot

PVR INOX ended FY26 with its strongest reported operating year since the merger, helped by a better content cycle and sharper financial discipline. On an Ind AS 116 adjusted basis, total income rose 16.4% year-on-year to INR 6,742.6 crore. EBITDA before exceptional items doubled to INR 968.0 crore and margin expanded to 14.4% from 8.4%. Profit after tax swung to INR 386.8 crore versus a loss in FY25, supported by both operating improvement and gains related to the divestment of a discontinued business.

The quarter was also strong. Q4 FY26 revenue (Ind AS 116 adjusted) grew 25% to INR 1,577.8 crore, while EBITDA increased to INR 169.6 crore from INR 28.9 crore in Q4 FY25. Operationally, the company hosted 31 million patrons in the quarter and 150.1 million in the year, keeping the multiplex cycle firmly in recovery mode.

What drove FY26: pricing, footfalls, and a stronger box office mix

India’s gross box office collections increased 11% in FY26 to INR 13,519 crore, according to company estimates citing Ormax. Management highlighted that growth was more balanced versus earlier years, with original Hindi content and Hollywood both recovering. The investor presentation also noted a comeback in mid-budget films, reducing dependence on mega blockbusters.

For PVR INOX, that backdrop translated into higher admissions and improved monetisation. FY26 admissions grew 9.6% to 150.1 million and occupancy improved to 26.2% from 23.0%. Average ticket price increased to INR 280 for the year and food and beverage spend per head rose to INR 147, both record levels per the company. In Q4 FY26, ATP reached INR 315 and SPH was INR 165.

FY26 revenue mix (Ind AS 116 adjusted)

Advertising was the slowest-growing revenue stream. On the earnings call, management attributed some of the softness to the shifting of a few large releases, which can create a vacuum in advertiser demand.

Cost discipline and operating leverage showed up in margins

While revenue grew, the company’s cost structure appears to have been managed tightly. In Q4 FY26, film hire cost increased as a percentage of revenue to 45.4% from 42.6%, but food cost improved materially, with COGS declining to 22.4% from 25.1%. Fixed costs (excluding movie distribution) rose 6.6% year-on-year in Q4, notably below revenue growth of 25%.

The investor deck also made a broader claim about productivity improvement since FY20 on a proforma basis. Headcount reduced to 20,659 from 24,285, and headcount per screen dropped to 12.1 from 17.7. Despite CPI inflation over the period, fixed costs per screen (excluding rent and CAM) were shown as broadly stable.

Management linked these changes directly to profitability resilience. In the Q and A, the company stated it is working to ensure that even at 27% to 28% occupancy, it can deliver EBITDA margins comparable to pre-Covid levels, with further upside if occupancy improves.

The strategic pivot: capital-light expansion becomes central

The most important shift in FY26 was the move toward capital-light growth. Of the 93 screens added during the year, 55% were under capital-light formats. The company defined two models:

• FOCO (franchisee-owned, company-operated), where the developer funds 100% capex and PVR INOX records a management fee.
• Asset-light, where developers contribute 40% to 80% of capex and PVR INOX consolidates the property’s operating performance.

The company ended FY26 with 1,798 screens across 359 cinemas in 113 cities (including Sri Lanka), and disclosed a signed capital-light pipeline of 138 screens (52 FOCO and 86 asset-light). On the call, management stated this pipeline is expected to be executed over the next 18 months.

This approach also reduced capital intensity. FY26 capex was INR 254.2 crore, down 24% year-on-year.

A new vector within this strategy is the Smart Cinema initiative aimed at Tier 2 and Tier 3 markets. Management said two pilots are expected to open by mid-July, and the company hopes to open about 28 to 30 screens under this model in the current financial year. The CFO added that per-screen capex for Smart Cinema is expected to be 30% to 40% lower than a mainstream cinema in the same location.

Cash flow, debt reduction, and the balance sheet reset

FY26 free cash flow was reported at INR 790.1 crore, more than doubling versus FY25 (INR 324.9 crore). The cash flow bridge in the investor deck showed that stronger EBITDA and lower capex were the main drivers, with additional support from net proceeds from the divestment of the 4700BC business.

Net debt reduced sharply to INR 161.9 crore as of 31 March 2026, from INR 952.2 crore a year earlier. Gross debt fell to INR 758.6 crore while cash rose to INR 596.7 crore.

The company also reported a breakout in return on capital employed, with ROCE improving to 10.2% in FY26. The ROCE calculation adjusted for Ind AS 116 and merger goodwill was included in the annexures.

In the Q and A, the CFO said the company intends to further bring down gross debt to around INR 500 crore in the near term. Questions on capital return actions such as dividends or buybacks were not met with commitments, though management indicated that such options are not off the table once the company turns net cash.

FY27: guidance focuses on expansion pace and controlled capex

Management’s forward commentary was primarily around screen additions and capital allocation. The company indicated visibility to open about 120 screens in FY27 and expects the capital-light mix to remain 55% to 60%. For FY27 capex, the CFO guided INR 375 crore to INR 400 crore, including around INR 225 crore to INR 250 crore for new projects, INR 80 crore to INR 100 crore for renovations, and the balance for maintenance and IT.

The content pipeline was positioned as broad across Hindi, regional and Hollywood, which management said supports confidence in the trajectory. However, the company also acknowledged that advertising momentum can be affected when large releases shift.

Takeaways

FY26 marked a clear operational and financial step-up for PVR INOX. Admissions rose, occupancy improved, and higher monetisation helped deliver record revenue and a doubling of EBITDA on an Ind AS 116 adjusted basis. More importantly, the company converted that performance into cash, delivering INR 790.1 crore of free cash flow and reducing net debt to a negligible INR 161.9 crore.

The next phase is defined by capital-light expansion and disciplined capex. If the company executes its signed pipeline while sustaining margins through cost control, the headline improvement in ROCE and balance sheet strength could become more structurally embedded rather than content-cycle dependent.