Strong Revenue Growth and …

Release Date: August 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• UFO Moviez India Ltd (BOM:539141) reported a 15% growth in consolidated revenue for Q1 FY26, reaching INR 10,190 million.

• The company’s EBITDA grew by 194% to INR 193 million compared to the previous year.

• Net profit for Q1 FY26 was INR 65 million, a significant turnaround from a net loss of INR 42 million in Q1 FY25.

• The advertising footprint expanded to 3,762 screens, including 2,251 multiplex screens.

• There was a 28% growth in advertisement revenue, contributing significantly to overall revenue growth.

• The number of movies released in Q1 FY26 decreased to 456 from 476 in Q1 FY25.

• Some films, such as ‘Thug Life’ and ‘Kubera’, missed expectations, reflecting ongoing market volatility.

• Central government advertising has lagged behind, with only minor traction observed.

• Lease rental revenue remained flat with only a 2% growth, indicating limited expansion in this segment.

• The company faces challenges in returning central government advertising to pre-COVID levels.

Q: Can you provide an update on central government advertising and when it might return to normal levels? A: Our state government business remains steady, but central government advertising has lagged. We’ve seen minor traction recently, which is promising. However, the timeline for returning to pre-COVID levels is uncertain as it’s controlled by the central government. We are optimistic due to inquiries from departments and ministries. – Rajesh Mishra, Executive Director and Group COO

Q: What were the primary revenue drivers for the 13% year-on-year growth, and is the profit turnaround sustainable? A: Revenue growth was democratic across all lines: 28% in advertisement revenue, 6% in distributor service fees, and 13% in digital cinema equipment sales. The profit turnaround is sustainable due to cost optimization post-COVID and high incremental margins from advertisement revenue. – Ash Malute, Chief Financial Officer

Q: Are the profit margins expected to expand further? A: Yes, as advertisement revenue grows, it contributes significantly to overall margins, including EBITDA and PBT margins, due to its high incremental margin percentage. – Ash Malute, Chief Financial Officer

Q: Can you explain the correlation between average minutes sold and ad share, and the potential for more minutes to be sold? A: The ad share percentage decreases as revenue grows due to fixed minimum guarantees to theaters. There’s no direct correlation between minutes sold and ad share, but as minutes increase, the ad share percentage will decrease. We expect minutes sold to increase as cinema sentiment improves, especially in Q2 and H2. – Rajesh Mishra, Executive Director and Group COO

Story Continues

Q: What was the highest average minutes sold in any quarter before COVID, and what is the potential operating leverage if minutes sold increase? A: The highest was 7.4 minutes in Q4 FY18, largely due to government spending. Currently, corporate contributions are strong, and any increase in minutes sold will significantly enhance operating leverage due to high PBT margins from incremental ad revenue. – Rajesh Mishra, Executive Director and Group COO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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