Karnataka - Business Outrank

The Karnataka proposal to set a ₹200 movie ticket cap threatens to cause substantial damage to PVR Inox’s revenue and profitability. The Karnataka government has published a draft notification which proposes to change cinema rules by establishing a ₹200 maximum ticket price including tax for all movie showings. The market of Karnataka represents a vital segment for PVR Inox since it generates 10% of box office revenue through its 215 screens. The current ticket price of ₹260 would decrease by 30% under the proposed cap. The company's consolidated average ticket price will decrease by 3.7% according to analysts which will result in a 2.2% revenue decline and an 1.8% Ebitda reduction during FY26-FY28. The blanket ticket price cap poses the most significant threat to premium formats including IMAX and 4DX because such investments might become unprofitable at these prices. The industry fought against a previous ticket price cap in 2017 until the courts lifted it in 2021. The revival of this policy could create difficulties for franchise partnerships while extending the time needed to generate profits from luxury screens and force operators to increase their food and beverage sales. The government supports the price cap for affordability reasons yet experts maintain that better content quality attracts more customers than ticket prices do. The proposed ticket price cap threatens to worsen PVR Inox's financial situation because the company already faces declining revenues and increasing losses.

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