Karnataka proposes ₹200 cap on movie tickets; PVR Inox faces revenue hit

The Karnataka government’s move to cap movie ticket prices at ₹200 across all theatres and multiplexes in the state could weigh on the revenue and profitability of India’s largest multiplex chain, PVR Inox Ltd.

According to a draft notification issued on Tuesday, the government has proposed amendments to the Karnataka Cinemas (Regulation) Rules, 2014, setting ₹200 as the maximum ticket price per show, inclusive of entertainment tax, for all films, regardless of language or format. The proposal, under the Karnataka Cinemas (Regulation) (Amendment) Rules, 2025, is open to public feedback for 15 days.

Karnataka a key market for PVR Inox

Karnataka accounts for 12.3 per cent of PVR Inox’s screen portfolio, with 215 of its 1,743 screens located in the state as of May 2025, Elara Securities’ Senior Vice President Karan Taurani told CNBC-TV18 on Wednesday. The state contributes approximately 10 per cent to the overall box office collections and 8 per cent to the Hindi segment, with an average ticket price (ATP) of ₹260.

A price cap at ₹200 would mark a 30 per cent drop in the average ticket price in Karnataka, which could lower the company’s consolidated ATP by 3.7 per cent. Taurani estimates that such a decline may translate to a 2.2 per cent reduction in top-line revenues and a 1.8 per cent hit to Ebitda for PVR Inox over FY26-FY28.

The move revives a pricing control debate last seen in 2017, when Karnataka introduced a similar ₹200 cap. That cap was later contested by the film exhibition industry and overturned by the Karnataka High Court in 2021, which permitted exceptions for premium formats like IMAX and 4DX. These formats currently attract prices between ₹600 and ₹1,000 on weekends in Bengaluru.

Premium screens, franchises at risk

Taurani cautioned that a blanket cap would undermine the economics of high-investment formats and potentially discourage future expansion under PVR Inox’s franchise model. The pricing restriction could reduce returns for franchise partners and delay the recovery of capital in luxury screen formats.

Since revenue-sharing with distributors is based on net ticket sales, a 30 per cent cut in pricing would also reduce earnings at the exhibitor level. The challenge is greater in premium malls, where high rental costs already push breakeven occupancy to 18–20 per cent per show. Operators may need to rely more on food and beverage sales to preserve profitability at the unit level.

The draft amendment also proposes deleting Rule 146 from the 2014 rules, though specific details on the impact of this change remain unclear.

Affordability vs content-driven footfalls

While the government has positioned the proposed cap as a way to make movie-going more affordable and encourage regional film viewership, Taurani noted that content quality—not pricing—remains the primary driver of theatre footfalls.

For the financial year ended March 31 2025, PVR Inox registered a sevenfold increase in consolidated net loss to ₹280 crore from ₹32 crore at the end of FY24. Meanwhile, consolidated revenue from operations fell 5 per cent to ₹5,780 crore from ₹6,107 crore.