Capping ticket prices could lead to derating of multiplex stocks

So far only 3 states have imposed cap on ticket prices, but this could change

The decision by the Karnataka government to cap movie ticket prices at Rs 200 is negative for listed multiplex chains, 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 to impose such a cap, the other two being Andhra Pradesh and Tamil Nadu. 

The worry for the Street is the