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ACTIVE FUNDAMENTAL EQUITY | GLOBAL EMERGING MARKETS EQUITY TEAM | MACRO INSIGHT | JULY 2019Recently, there was quite a furore in India about the steep pricing of food items at multiplexes. There were several Public Interest Litigations filed against multiplexes and the matter is now being heard in the Supreme Court. While the law will decide on the subject, it might be worthwhile to look at the popcorn price issue through a broader lens than just how much popcorn costs and how much it is sold for in multiplexes. As a consumer, there is no question that food items are expensive at multiplexes when compared to a regular food outlet and yet I would disagree with the accusation that at an aggregate level multiplexes are profiteering. I believe the best measure to put that accusation to bed is the Return on Equity (RoE) that multiplexes make i.e. what returns are providers of capital making on their investment. Average RoE for the two leading multiplex chains in India, PVR and Inox Leisure,...