Rs 200 ticket fallout: Karnataka’s move could dent PVR Inox revenues, exhibitors urge for dialogue

The state accounts for 12.3 percent of PVR Inox’s total screen portfolio, with 215 screens out of 1,743 as of May 2025, noted Karan Taurani, Senior Vice President, Elara Capital.

Karnataka is key

The state contributes around 8 percent to the Hindi box office and around 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.

"Given Karnataka’s 12.3 percent screen share, the price cap is estimated to lead to a 3.7 percent decline in consolidated ATP, potentially impacting headline revenues and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) (post-Ind AS) by around 2.2 percent and 1.8 percent respectively across FY26-28," he said.

Premium formats such as IMAX and 4DX in Bengaluru typically command weekend ticket prices in the Rs 600–1,000 range, and a uniform price cap could extend the payback period for these capex (capital expenditure)-intensive formats, Taurani added.

"If implemented, the cap could structurally impair franchise-led expansion of PVR Inox by hurting franchise partner sentiments due to ROI (Return on Investment) 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," he added.

Exhibitors may need to increasingly rely on food and beverage (F&B) upselling to support unit-level profitability, Taurani added.

Mendiratta said that a one-size-fits-all pricing strategy could intensify competition in ways that may be counterproductive, particularly for single screens trying to stay relevant. "We hope the government engages in an open dialogue with exhibitors and the wider film fraternity before finalising the policy, so that we can work together to balance accessibility with long-term sustainability,” he added.

Karnataka govt issues draft notification to cap movie ticket prices at Rs 200

Pricing pangs

Exhibitors previously had raised concerns regarding the price cap. If the cap on movie tickets is implemented, it will have a long-term negative impact on exhibitors.

The cap could pose a bigger challenge for single screen theatres as no differential pricing would lead to single screen audience shifting to multiplexes; hence, single screen theatres will be under more pressure.

The decision to cap movie tickets at Rs 200 was announced in the Karnataka Budget in March this year. On July 15, the state published a draft amendment to Karnataka Cinemas (Regulation) Rules, 2014, proposing a uniform cap of Rs 200 on movie ticket prices across all theatres, including multiplexes, for all language films.

Affordability versus viability

The draft notification issued by the Karnataka government is currently open for public feedback and objections for 15 days, following which the government is required to review all submissions before releasing a final gazette notification.

Taurani expects exhibitors to consider legal recourse against the potential implementation. "Past precedents suggest a favourable outcome is possible, as investments in premium formats and differentiated consumer experiences could be used to justify higher ticket pricing in court."

"While the government intends to make cinema more affordable and promote local language films, historical trends indicate that content quality plays a more critical role in driving footfalls than ticket pricing," he added.

When the initial announcement came regarding the price cap, Girish Johar, producer and film trade expert, said that the government's intention was right. Karnataka, led by Bengaluru, is one of the most film-friendly cities. It is a city where not only Tamil, Telugu, Kannada, Hindi, Hollywood, but sometimes Marathi and Gujarati films also do well. Higher ticket prices make it expensive for a large section of audiences, and hence the government wants to make it affordable, he had said. Johar had also highlighted how cinema-going has become event watching from habitual watching, affecting overall footfalls. According to him, affordable movie tickets will help medium and small-budget films attract an audience.

He, however, had also pointed out that the cap will hurt exhibitors' economics with the rentals, regular upgradation coming under high-cost elements.

Exhibitors in Tamil Nadu where movie tickets are also capped, have said that it limits the profitability and viability of premium format offerings.

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.

Past decisions

Taurani pointed out that a similar measure was implemented earlier by the Karnataka government in April 2017, when it introduced a cap of Rs 200 on movie ticket prices across all theatres, including multiplexes.

"The film exhibition industry challenged the decision in court and, in 2021, secured a favourable verdict from the High Court, which allowed exceptional pricing for special and luxury formats," he said.

The state later withdrew the order and left cinema pricing to exhibitor discretion.