Covid pandemic has fuelled demand for home theatres in a big way: Sesha Reddy

Tollywood stars Akkineni Nagarjuna, Junior NTR and Mahesh Babu rule the Telugu filmdom in their own way. But they have one thing in common. They all own customised and luxurious home theatres conceptualised, developed and installed by Hyderabad-based Vector Systems Private Limited. But the entrepreneurial journey of MV Sesha Reddy, who founded this company, is as inspirational as it gets. Landing in Hyderabad with a small backpack, Reddy went on to build a successful enterprise in the niche home theatre segment. "A chance meeting with film star Nagarjuna was the turning point in my life. He gave me the first big order. So far, we have set up 2,000 home theatres in Telugu States, Karnataka, Delhi and some other places. Demand for customised home theatres picked up after the Covid and we are getting orders even from small towns and villages," MV Sesha Reddy tells Bizz Buzz in an exclusive interaction

Good personal contacts essential for the success of the home theatre business that we are in. So, we are going for a franchise model to expand our network in Telugu States and other parts of the country. A franchise store can be established with investments ranging from Rs 25 to 30 lakh. Franchise owners can recover the investment in around three years

Cost of developing a home theatre starts from Rs 50,000, but there is no upper limit. We developed a home theatre for Rs 2.5 crore. That's the biggest order we executed so far. We executed over 25 projects that cost over Rs 1 crore each. Most of them are in Hyderabad though we have done some in Karnataka and other places

What is the impact of the Covid-19 pandemic on your business?

We had two experience showrooms- one each in Hyderabad and Bengaluru. We closed the Bengaluru showroom as it was not possible to travel during the pandemic. We have a sales office there now. However, we undertake orders from across South India. In Hyderabad, we opened the experience showroom in Jubilee Hills in 2011 with an investment of Rs4.5 crore. Before that, we operated from a small outlet in Banjara Hills.

Though the pandemic has adversely impacted my business, the awareness about home theatres has gone up phenomenally now. So are also the sales. Indians always relied on theatres for entertainment. But with the arrival of the pandemic, there was no chance for people to go out and enjoy movies. So, most families depended on television for entertainment. That way, people realized the importance of home theatres. The Covid pandemic has fueled demand for home theatres in a big way. Moreover, most of films are releasing on OTT (Over-the-top) platforms these days. So, even people from small towns and villages are going for home theatres.

How did you get the idea of setting up the home theatre business?

I hail from a small village near Nandyal in Kurnool district of Andhra Pradesh. My father is a small farmer. After completing my Diploma in Electronics and Communications Engineering in Banaganapalle, I went to Bengaluru for a job. In Karnataka, there was a concept of mini theatres using DVD players. I worked as an installation engineer for such theatres from 1996 to 2000. During that period, I completed B Tech (ECE) in part-time mode. I came to Hyderabad with just a backpack for doing my B Tech project. In those days, I wanted to do a software job, but was offered a meagre salary of Rs10,000. I was earning Rs25,000 when I worked in Karnataka as the installation engineer! So, I gave up the idea of working in the IT sector and started repairing home theatres as I was confident that I can earn Rs10,000 on my own. My experience in Karnataka came in handy. Subsequently, I started sales. Initially, I did not hire any employees. Now, I have 45 people working for my company. A chance meeting with film star Nagarjuna is a major turning point for me. He gave me the first big order. Further, he also referred our company to others. Through such referrals, our company executed home theatre projects for many film stars including Mahesh Babu and Junior NTR. I never looked back thereafter.

What is your customer base now?

So far, we set up over 2,000 home theatres. Telangana and Andhra Pradesh are the major markets for us, accounting for over 1,600 home theatres. However, we took up projects across South India and in Delhi too.

What are your expansion plans?

Good personal contacts essential for the success of the home theatre business that we are in. So, we are going for a franchise model to expand our network in Telugu States and other parts of the country. Initially, we are planning to have franchise stores in cities like Warangal and Karimnagar in Telangana as well as Vijayawada, Rajamahendravaram in Andhra Pradesh. Our plan is to have our franchise stores in district headquarters. We would have already opened five to six franchise stores, but for the Covid. We are hopeful of closing some franchise deals by March next year. Each franchise store requires an investment of Rs 25 lakh to Rs 30 lakh. Franchise owners can recover their investments in around three years. Besides, we also opted for the shop-in-shop concept. Under this, there will be a small shop in a large furniture or home needs store. We already have five such outlets.

How much one needs to spend for setting up a good home theatre?

One can have a home theatre setup by spending as low as Rs50,000. However, there is no upper limit. We executed a home theatre project that cost Rs2.5 crore. That's the biggest project we handled thus far. We completed it in three months. In all, we executed over 25 projects that cost Rs1 crore each. Most of them are in Hyderabad though we have done some in Karnataka. A home theatre mainly comprises speakers, projector and amplifiers. Further, cost also depends on acoustics, room design and chairs. Most of the equipment we use is imported. Prices also vary from brand to brand. A speaker is available for Rs 10,000, Rs 10 lakh or Rs 1 crore. It depends on an individual's budget.

Only rich people can afford such home theatres. What is the profile of your clients?

Our client base includes film stars, others from the entertainment industry, business tycoons, HNIs, corporate leaders, CEOs, etc. We also did projects for those in the mining business. However, we can't divulge the details. Of late, politicians are also opting for large home theatres. We did some projects for politicians in Telugu States and Karnataka too.

This is a niche, highly technical business. How is the competition in this segment?

Now, there is a huge competition in the market. In Hyderabad, there are four to five companies of our size. Besides, there are over 20 small companies which handle projects that cost up to Rs 4 lakh.

How big is the home theatre market?

It's huge. The home theatre market has been growing for the past seven years. As per my knowledge, annual home theatre business in Telugu States is pegged at around Rs200-300 crore. Our turnover from the two States is around Rs30-40 crore. That means we have a decent market share here. Our overall turnover is around Rs 50 crore. We will get good margins if we take up projects on a turnkey basis. Under this, we convert a room into a home theatre. Margins will be lower when we supply just equipment. We also undertook projects for single-screen movie theatres.

Moreover, we are now educating real estate developers to offer home theatre in new residential units. Some builders are offering home theatres in club houses. We did that work in 25 club houses till date.

Apart from home theatres, we also undertake home automation works. With home automation, house owners can control all the devices from their smartphones. Home automation cost starts at Rs50,000 but can go up to Rs 5 lakh. Even old houses can be automated. We took up automation work for some residential real estate projects.