Shares of PVR-Inox fell nearly 1% to ₹979.80 today after the Karnataka government proposed capping movie ticket prices at ₹200 (tax inclusive) across all theatres and multiplexes. Analysts warn this move could weigh on the exhibitor’s revenues and profitability if implemented.
The draft notification, which follows Karnataka’s March 2025 budget, applies to all languages and formats and is now open for public feedback for 15 days before a final order is issued.
Why Karnataka matters to PVR-Inox
Karnataka is a significant market for PVR-Inox, housing 215 of its 1,743 screens — about 12.3% of its portfolio. The state contributes nearly 10% of overall box office collections, with the current average ticket price (ATP) around ₹260.
The proposed ₹200 cap represents a 30% cut in ATP in Karnataka. Analysts estimate this could lead to a 3.7% drop in consolidated ATP and shave off around 2.2% of revenue and 1.8% of EBITDA between FY26–28E.
Impact on premium formats and growth
Premium formats like IMAX and 4DX, which typically charge ₹600–1,000, would also see margins eroded and longer payback periods if uniform pricing is enforced. Lower profitability could dampen PVR-Inox’s franchise-led expansion plans, especially in premium malls where higher rents already pressure margins.
Analysts expect the company to rely more on food & beverage sales to offset the pressure on ticket revenue.
What’s next?
The exhibition industry could challenge the cap in court. In a similar case in 2017, the Karnataka High Court allowed exceptions for premium formats.
Karan Taurani of Elara Securities commented: “The proposed cap is likely to dent earnings, but given the company’s scale, the impact may be manageable if flexibility for premium formats is allowed. We maintain an Accumulate rating on PVR-Inox with a ₹1,100 target price.”
While the government aims to make cinema more affordable, analysts believe content quality, rather than price caps, remains the key driver for footfalls.
