Connplex Cinemas LtdQ3 FY25Entertainment

Connplex Cinemas Ltd

Q3 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→Connplex has an order book for about two years with plans to introduce 50-60 screens by FY26 year-end and another 60-75 screens by FY27 year-end.
→The company aims to add approximately 60 to 70 screens in the next one and a half years, expecting operational royalty revenue to double as screens increase (e.g., 17 screens added in H1 FY26, targeting 41 in H2 FY26).
→Revenue growth will be driven by an increase in operational screens as well as growth in core areas like ticketing, food & beverages (F&B), and advertising.
→Expansion focus is on Tier 2 and Tier 3 cities where cinema is a primary entertainment source and competition is lower, providing strong growth potential.
→Revenue recognition from new screens will align with construction completion and licensing; partial revenue from ready but non-operational screens is accounted.
→Future shifts anticipated where recurring operational income (from royalties on ticket sales, F&B, and advertising) will grow alongside one-time construction income.

Category 3

→Connplex plans to add around 50-60 screens by the end of FY26 and another 60-75 screens by the end of FY27, indicating significant expansion in operational capacity.
→Revenue is expected to grow with more screens becoming operational; operational royalty revenue is projected to roughly double in H2 FY26 compared to H1 FY26.
→Both cinema construction income and operational income (ticketing, F&B, advertising) will increase as new screens come online.
→EBITDA margins may vary 3-4% depending on the revenue mix but are expected to be sustainable given the asset-light model.
→Operating cash flow is currently impacted due to expansion-phase working capital investments but is expected to improve in the coming periods.
→Management is focused on long-term growth with recurring income from franchise fees, ticket sales, and ancillary revenue streams supporting future profit expansion.
→No explicit EPS guidance was shared in the call, but the growth in revenues and profitability indicates positive future earnings trajectory.

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→There is no explicit mention on page 25 or surrounding pages of any current or planned new fundraising through debt or equity.
→The company recently completed an IPO, with approximately INR 24 crores raised, primarily for purchasing LEDs and CapEx, of which about INR 23 crores remain unutilized as of the call.
→The unutilized IPO funds are planned to be progressively deployed in line with cinema development and projector purchases.
→No mention is made of additional fundraising plans beyond utilizing the IPO proceeds.
→Debt levels are hinted at increasing due to fast cinema work completion and increasing debtors, but no direct fundraising through debt is stated.

Yes

→The company has an order book for about the next two years.
→Approximately 50 to 60 screens are planned to be introduced by the end of FY26.
→An additional 60 to 75 screens are expected to be added by the end of FY27.
→In the last month, agreements were signed for around 22 new screens.
→For H2 FY26, the target is around 41 screens, with more than 16 screens in the licensing process.
→About 18 screens are ready and can start operations immediately.
→Some screens in Patna and Mundra are pending licenses and expected to become operational soon.
→Expansion is ongoing, with rapid construction and licensing processes underway.

Yes

→The company is actively expanding by adding new cinema screens, with plans to introduce around 50-60 screens by the end of FY26 and another 60-75 screens by FY27.
→IPO funds amounting to around INR 24 crores have been raised mainly for purchasing LEDs, projectors, and other technological assets; approximately INR 1.40 crores utilized so far, with the bulk planned for H2 FY26 in line with cinema development.
→Average cost of a projector is around INR 27-28 lakhs, with about 80-85 screens' worth of projectors funded by the IPO proceeds.
→Centralized procurement of customized inventory (chairs, air conditioners, carpets, sound systems) is maintained to support ongoing expansion.
→The company is considering introducing small gaming zones inside cinemas in the future where viable but currently focuses solely on cinemas.

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