PVR Inox Shares Slip 2% As Karnataka’s Ticket Pricing Cap Threatens Earnings Growth

Shares of multiplex giant PVR Inox slipped 2% on July 16, following the Karnataka government’s proposal to cap movie ticket prices at ₹200 across the state. This draft notification, released just a day prior, mandates that ticket prices must not exceed the ₹200 threshold, inclusive of entertainment tax, and applicable to all theatres including multiplexes.

This price cap, the first of its kind in Karnataka, marks a significant regulatory intervention aimed at making cinema more affordable but poses a substantial challenge for cinema chains such as PVR Inox.

“Currently, the average ticket price (ATP) in Karnataka stands at around ₹260, so the proposed ceiling would bring a near 30% reduction in ticket pricing at the state level. Karnataka accounts for approximately 12.3% of PVR INOX’s total screen portfolio with 215 screens across 37 cinemas, thus the pricing cap could impact nearly one-eighth of the company's screens,” Karan Taurani, Senior Vice President at Elara Capital had said to Moneycontrol.

He further projected the regulation to tip off a 3.7% decline in PVR Inox’s consolidated ATP and a subsequent 2.2% and 1.8% reduction in headline revenues and Ebitda, respectively, over FY2026-2028.

Meanwhile, premium formats such as IMAX and 4DX, which command ticket prices between ₹600 and ₹1,000 in Bengaluru, are likely to see the most pronounced impact, potentially elongating the investment recovery period for these high-cost formats. Concerns have also been raised regarding the viability of franchise-driven expansion, as the reduced ticket revenue could impair franchise partner returns and profitability, especially given the high rentals in premium locations.

PVR Inox has been aggressively expanding in South India, where 40% of its total 1,761 screens are located, including a strong presence in Karnataka. The company views this region as a growth engine, underpinned by higher occupancy rates than the national average and a growing movie-going culture.

PVR Inox plans to add about 200 screens across India over the next two years, with 40% of new screens continuing to come from the southern states, including Karnataka. The new price regime threatens to undermine this expansion strategy by putting pressure on ticket revenues in a key market.

The government has allowed a 15-day period for public feedback on the proposed pricing cap, signalling that stakeholder engagement is underway. Meanwhile, industry voices including multiplex associations have expressed apprehension, arguing that the ₹200 ceiling is insufficient to maintain the financial sustainability of theatres, particularly premium multiplexes. Moreover, there is some concern about the possibility of unofficial ticket price hikes or a black market emerging if the cap is strictly enforced.

In comparison, Tamil Nadu has a ticket price cap at ₹150, but it excludes taxes and service charges and allows some flexibility through dynamic pricing, which Karnataka’s draft does not seem to accommodate.

With Karnataka accounting for nearly 10% of overall box office collections and 8% of Hindi film revenues for PVR Inox, the ticket price cap represents a critical development that could have a ripple effect on the company’s revenues and expansion plans in the southern region. Investors and market watchers will be closely monitoring PVR INOX’s share performance and the company’s official response in the days ahead.