16 Jul , 2025 By : Debdeep Gupta
Multiplex operator PVR INOX Ltd shares slipped on Wednesday, July 16, after the Karnataka government proposed a cap on movie ticket prices at Rs 200 each.
The rule would be applied across theatres in Karnataka, from single-screen operators to large-scale multiplexes. Further, it would included all entertainment tax. According to the draft, the public has around 15 days to respond to the proposal. PVR INOX is yet to officially respond.
At 9.22 a.m., shares of the firm were quoting Rs 984 on the NSE, down 0.6 percent.
In Tamil Nadu ticket prices are capped at Rs 150 excluding goods and services tax and local taxes while in Telangana ticket rates for regular seats are capped at Rs 295 and at Rs 350 for recliner seats. In Andhra Pradesh, ticket prices are capped at Rs 177 and Rs 295 for regular and recliner seats respectively.
As of May 2025, Karnataka accounts for 12.3 percent of PVR-INOX’s total screen portfolio, with 215 screens out of 1,743. Further, the state contributes eight percent to the Hindi box office and ~10 percent to overall collections, with an average ticket price (ATP) of Rs 260. The proposed cap at Rs 200 implies a ~30 percent reduction in state-level ATP, noted Elara Securities.
The brokerage added that given Karnataka’s screen share, the price cap is estimated to lead to a 3.7 percent decline in consolidated ATP, potentially impacting headline revenues and EBITDA (post-Ind AS) by ~2.2 percent and ~1.8 percent respectively across FY26-28E.
"Premium formats such as IMAX and 4DX in Bengaluru typically command weekend ticket prices in the Rs 600–1,000 range; a uniform price cap could extend the payback period for these capex-intensive formats," added Karan Taurani, Executive Vice President at Elara Securities.
Further, if the proposal is implement, the cap could structurally impair franchise-led expansion of PVR-Inox by hurting franchise partner sentiments and ROI concerns.
Since distributor revenue is linked to net ticket collections, a 30 percent price cut would directly impact exhibitor earnings, especially in premium malls where high rentals and reduced ticket pricing may raise the occupancy breakeven threshold above the current ~18–20 percent per show. As a result, exhibitors may need to increasingly rely on food and beverage (F&B) upselling to support unit-level profitability.
"We continue to closely monitor industry reactions and the regulatory process," said Elara Capital. It maintained its 'accumulate' rating on PVR INOX shares, with a price target of Rs 1,100 per share.
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