💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 57% YoY to ₹64.06 Cr in H1 FY26. Segmentally, Cinema Making (Construction) contributed ₹29.86 Cr (~46.6% of total), while Exhibition, F&B, and Ancillary streams contributed ₹34.20 Cr (~53.4%). Historical revenue CAGR from FY23 to FY25 was 55.77%.

Geographic Revenue Split

The company operates 31 cinemas across 9 Indian states, primarily targeting Tier-II and Tier-III markets. Specific % contribution per state is not disclosed, but the strategy focuses on under-penetrated regions with high demand-supply gaps.

Profitability Margins

PAT Margin for H1 FY26 was 20.38%, a decline from 23.61% in H1 FY25. Historical PAT CAGR (FY23-25) was 125.93%. The decline in margins is attributed to higher operational and expansion-related costs during the rapid network scale-up.

EBITDA Margin

EBITDA Margin for H1 FY26 stood at 27.87%, representing a decline of 363 bps from 31.5% in H1 FY25. EBITDA increased 39% YoY to ₹17.86 Cr. Historical EBITDA CAGR (FY23-25) was 115.42%.

Capital Expenditure

Planned CapEx of ₹24 Cr from IPO proceeds for purchasing LED screens, projectors, and a corporate office. As of Q2 FY26, ₹1.40 Cr has been utilized for technological assets, with ₹23 Cr remaining for H2 FY26 deployment.

Credit Rating & Borrowing

Long-term borrowings stood at ₹1.77 Cr as of H1 FY26. Specific credit ratings and interest rate percentages were not disclosed in the available documents.

⚙️ Operational Drivers

Raw Materials

Key operational inputs include LED screens and high-definition projectors (representing a ₹24 Cr CapEx allocation), recliner seating, acoustic materials, and F&B inventory (popcorn, beverages).

Key Suppliers

Not disclosed in available documents; however, inventory is processed through a central facility for customization before dispatch to franchises.

Capacity Expansion

Current capacity is 83 screens and 6,831 seats across 31 cinemas. Planned expansion includes adding 50-60 screens by the end of FY26 and another 60-75 screens by the end of FY27 to reach a total of ~180-200 screens.

Raw Material Costs

Direct costs for H1 FY26 were ₹34.67 Cr, representing 54.1% of revenue. The company is utilizing bulk purchasing strategies to lower procurement costs during the expansion phase.

Manufacturing Efficiency

Occupancy levels improved to 32% in H1 FY26 from 30% YoY. The model uses 70-75 seat auditoriums to match India's average occupancy, ensuring higher seat utilization and lower waste.

Logistics & Distribution

Distribution costs are part of the 'Other Expenses' which stood at ₹7.77 Cr in H1 FY26. Logistics involve moving customized cinema equipment to 31 locations across 9 states.

📈 Strategic Growth

Expected Growth Rate

55.77%

Growth Strategy

Growth will be achieved by doubling screen count from 83 to ~200 by FY27, focusing on Tier-II/III markets, and transitioning to a royalty-heavy model. Once 200 screens are operational, royalty income is expected to exceed 70% of total revenue.

Products & Services

Movie ticket exhibition, Food & Beverage sales, on-screen and off-screen advertising, cinema construction/setup services (EPC), private events, and convenience fees from booking portals.

Brand Portfolio

CONNPLEX

New Products/Services

Expansion into private events and space rentals, which provide high-margin ancillary revenue streams alongside traditional exhibition.

Market Expansion

Aggressive expansion in under-penetrated Tier-II and Tier-III markets where demand for premium cinema (recliners/LED tech) is high but supply is limited.

Strategic Alliances

Operates an 80:20 franchise model where Connplex retains 20% of all revenue (Tickets, F&B, Ads) as royalty while the franchisee manages local operations.

🌍 External Factors

Industry Trends

The industry is shifting toward premiumization in smaller towns. Connplex is positioned to capture this via an asset-light model that avoids the high CapEx/OpEx of traditional 200-seat multiplexes.

Competitive Landscape

Competes with PVR-Inox but at a lower cost base. Connplex ATP of ₹243 is higher than some competitor segments, targeting a 'discerning' audience in Tier-II/III cities.

Competitive Moat

Moat is built on 'Smart CapEx-OpEx' efficiency. By building 70-seat auditoriums with ₹4 lakh monthly rent (vs ₹30 lakh for competitors), Connplex maintains profitability even at lower absolute footfalls.

Macro Economic Sensitivity

Highly sensitive to the Indian film industry's output. Blockbuster releases like 'Singham Again' and 'Pushpa 2' are critical drivers for H2 FY26 performance.

Consumer Behavior

Patrons are showing increased Spend Per Head (SPH) on F&B and a preference for luxury recliner seating over traditional cinema chairs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to local cinema licensing and the receipt of 'Unit Occupancy Certificates' before new screens can be commissioned.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 24.7% (₹4.28 Cr tax on ₹17.33 Cr PBT).

Legal Contingencies

The company uses standardized franchise agreements with penalty clauses to mitigate the risk of franchisees attempting to exit the network after a site becomes successful.

⚠️ Risk Analysis

Key Uncertainties

Revenue mix volatility: Margins fluctuate by 3-4% depending on the balance between one-time cinema construction fees (30% margin) and recurring operational royalty income.

Geographic Concentration Risk

Spread across 9 states, reducing single-state regulatory risk, though Tier-II/III focus makes it sensitive to rural/semi-urban economic shifts.

Third Party Dependencies

High dependency on franchisees for day-to-day operations and maintenance of brand standards across 31 locations.

Technology Obsolescence Risk

Mitigated by the transition to LED screens and projectors, funded by ₹24 Cr of the IPO proceeds.

Credit & Counterparty Risk

Receivables increased in H1 FY26 due to the expansion phase; receivables quality is managed through the 80:20 revenue-sharing collection model.