Ticket price cap may lead to derating of multiplex stocks

There are a couple of ways the move impacts multiplexes' financials

The decision by the Karnataka government to cap movie ticket prices at Rs200 is a negative for the listed multiplex chains of PVR and Inox Leisure. The two stocks corrected 3-3.5 per cent on Wednesday when the move was announced. Karnataka accounts for about 15 per cent of revenues for PVR and 13 per cent of its total screen count while the number is under 10 per cent for Inox on both parameters. Karnataka becomes the third state in the country with the other two being Andhra Pradesh and Tamil Nadu which have capped ticket prices. 

The worry for the