UFO Moviez

UFO Moviez reported a strong Q4 FY26, with consolidated revenue growing 42.77% year-on-year to ₹134.2 crores and EBITDA increasing 54.24% to ₹18.2 crores. For the full fiscal year 2026, revenue rose 14.72% to ₹486.4 crores, and net profit surged 159.38% to ₹24.9 crores, reflecting significant operational improvements. The company ended FY26 with a consolidated cash balance of ₹136.2 crores and a net cash position of ₹59 crores, demonstrating robust financial health.

The quarter witnessed improved theatrical momentum, particularly in March, driven by the exceptional success of "Dhurandhar: The Revenge," which significantly boosted box office collections and advertiser traction. While February saw softer performance due to fewer major releases, the overall content pipeline for FY26 was robust, with 1,834 movies released compared to 1,808 in FY25. Management expressed optimism for Q1 FY27, citing a positive outlook with several high-profile releases such as "Peddi" and "Welcome to the Jungle," expecting to continue the momentum from the previous year.

UFO Moviez maintained its position with the largest multiplex screen advertising network in India, now spanning 4,049 screens, including 2,597 multiplex and 1,452 single screens. The network has significantly shifted towards multiplexes, growing from approximately 1,000 to 2,500 screens. This shift has led to a higher revenue sharing percentage with exhibitors, reflecting the superior infrastructure and viewing experience offered by multiplexes, which enhances overall advertising revenue opportunities for the company.

The company has actively optimized manpower costs, with the 8.48% increase in employee expenses to ₹94.7 crores in FY26 primarily attributed to ₹9 crores in variable payouts linked to improved profitability. Furthermore, the loss-making Caravan business operations have been completely shut down from this year onward due to inconsistent business pipeline, eliminating associated costs. Assets from the Caravan business, being over 10 years old, were disposed of for ₹2-3 crores, further streamlining operations.

Trade receivables increased to ₹162 crores in FY26 from ₹115 crores in FY25, pushing the consolidated Days Sales Outstanding (DSO) to 147 days from 121 days. This rise was primarily attributed to the late Q4 release of the blockbuster "Dhurandhar," whose revenue was booked at year-end, combined with the typical 110-160 day realization cycle for advertisement sales. Management noted that this DSO level is not materially out of line with the pre-COVID FY19 level of 134 days and that adequate provisions have been made, indicating no systemic collection issues.

The revenue sharing percentage with executors has increased from a historical 30-35% to 50-60%. This is primarily due to the company's evolving network, which is now heavily focused on multiplexes that command a higher share due to better infrastructure. Management clarified this is not a loss of pricing power but a reflection of the value provided. They anticipate this sharing ratio to gradually decline as overall revenues scale up, especially since a large portion of expenses are minimum guarantee structures, which will become a smaller percentage of higher revenues.

UFO Moviez maintains a strategic policy of holding both cash and debt on its books. This approach, reinforced by lessons from the COVID-19 pandemic, provides liquidity for potential M&A opportunities and resilience during challenging times. While the net cash position improved from ₹48.3 crores to ₹59 crores in FY26, the company also carries debt, primarily for funding expensive equipment installed in theatres. Management reiterated its commitment to evaluating shareholder returns, having distributed over ₹300 crores in dividends historically, when excess cash is not required.