The Karnataka government has proposed capping movie ticket prices at ₹200 (tax inclusive) across all theatres and multiplexes, a move that could weigh on PVR-Inox’s revenues and profitability, according to analysts.
The draft notification, announced following Karnataka’s March 2025 budget, applies to tickets for all languages and formats and is now open for public feedback for 15 days before the final order is issued.
Why this matters to PVR
Karnataka is a key market for PVR-Inox, accounting for 12.3% of its total screens (215 out of 1,743 as of May 2025). The state contributes around 8% to the Hindi box office and about 10% to overall collections, with the average ticket price (ATP) currently at ₹260.
If the ₹200 cap comes into force, it would mean a nearly 30% reduction in ATP in Karnataka, translating to an estimated 3.7% decline in consolidated ATP, which could shave off about 2.2% of headline revenue and 1.8% of EBITDA for PVR-Inox over FY26–28E.
Premium formats like IMAX and 4DX, which currently command weekend prices of ₹600–1,000, would also see margins eroded and extended payback periods under uniform pricing.
Could this hurt PVR’s growth?
If implemented, the cap could also hurt PVR-Inox’s expansion plans by lowering returns for franchise partners, particularly in premium malls where higher rents and reduced ticket prices could push breakeven occupancy rates beyond the current ~18–20% per show.
The impact could force exhibitors like PVR to rely more heavily on food & beverage sales to offset weaker ticket revenues.
What’s next?
Exhibitors may challenge the cap in court — a similar move in 2017 was partially overturned by the Karnataka High Court, which allowed higher pricing for premium formats.
Karan Taurani of Elara Securities notes:
“The proposed cap is likely to dent earnings, but given the company’s scale, the impact may be manageable if the courts allow flexibility for premium formats. We maintain an Accumulate rating on PVR-Inox with a target price of ₹1,100 per share while monitoring developments closely.”
While the government aims to make movies more affordable, analysts argue that content quality, rather than ticket prices, is what truly drives footfalls.
