PVR Ltd.'s Growth and Future Prospects


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Case Details:

Case Code : MKTG127
Case Length : 20 Pages
Period : 1995-2005
Organization : -
Pub Date : 2006
Teaching Note :Not Available
Countries : India
Industry : Film Exhibition Industry

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Challenges

Even though the Indian entertainment industry, especially the film exhibition business, showed a lot of promise, PVR faced many challenges in the form of competition, government regulations, etc.

Competition:
Having initially concentrated on the NCR and being the first player in the multiplex business in that region helped PVR to register a healthy growth over the years.

The entry of new players in 2001, however, posed a challenge to PVR even in places where it was the leader (Refer Exhibit VI for major competitors of PVR and their expansion plans). The New Delhi-based Satyam Cineplexes was running 12 screens at three sites in Delhi in 2005 with a total of more than 5000 seats and was to invest over Rs. 25 billion in cineplexes across the country. It was aspiring to become a national player by 2008 by adding 100 screens all over the country.

Outlook

The Compound Annual Growth Rate (CAGR) in revenues of PVR between 2001 and 2005 was 35%. The unconsolidated total income was Rs. 706.66 million and Rs. 805.9 million in fiscal 2005 and for the nine-month period ended December 31 2005, respectively. Around 4.8 million movie goers visited PVR multiplexes in 2004-05, and an occupancy rate of 41.1% was registered (Refer Exhibit VIII for Performance Indicators for PVR Ltd.).

Though these figures were impressive, the impending competition had the potential to spoil the party for PVR.

The urban population in India in the age group 15-34, the most frequent movie-goers in the country, was expected to grow from 107 million in 2001 to 138 million in 2011.

Moreover, the retail boom in the country coupled with increasing disposable income among the ever-expanding Indian middle class was expected to fuel the growth of multiplexes all across the country. In 2005, the number of footfalls at multiplexes increased by 40-50% over the previous year indicating the growth in the business.

Exhibits

Exhibit I: PVR Ltd's Logo
Exhibit II: PVR Ltd's Shareholding Pattern
Exhibit III: The Pioneering Features Introduced by PVR Ltd
Exhibit IV: Future Expansion Plans of PVR Ltd
Exhibit V: Summary Statement of Profit and Loss Account of PVR Ltd. (2001-2005)
Exhibit VI: Major Competitors of PVR and their Expansion Plans
Exhibit VII: Future Openings of Adlabs Cinemas
Exhibit VIII: Performance Indicators for PVR Ltd.

 

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