B.A.G. Convergence Ltd Management Discussions

[Pursuant to Part B of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

We present a comprehensive report on Management Discussion and Analysis focusing on business performance and outlook within the competitive landscape set by B.A.G. Convergence Limited (the BAG DIGITAL/the Company).

GLOBAL AND INDIAN ECONOMY OVERVIEW

The global economy continues to navigate a challenging and uncertain environment, marked by persistent geopolitical tensions in the middle East. The ongoing conflict has contributed to volatility in energy prices, renewed inflationary pressures and expectations of tighter monetary conditions across several economies.

Before the conflict, the global Inflation was largely stable but with supply disruptions of crucial commodities, particularly oil and natural gas, the global inflation has picked up. In all, global headline inflation is projected to pick up to 4% in 2026, with advanced economies seeing the inflation rise due to increases in energy costs. Global inflation is expected to moderate to 3.1% in 2027 as the average crude price declines.

According to the International Monetary Fund (IMF), global GDP growth stood at 3.3% in FY 2024-25 and is expected to remain at 3.3% in FY 2025-26, reflecting resilience in economic activity across major regions. Advanced economies are projected to grow by 1.8% in FY 2025-26. Beyond geopolitical risks, persistent trade policy uncertainty, supply-chain disruptions, and climate related events continue to pose challenges to the global growth outlook.

The IMF has highlighted a range of additional downside risks which is beyond geopolitical risks: a further escalation of trade tensions, supply-chain disruptions, climate related events continue to pose challenges, a correction in AI-related investments, sovereign fiscal deterioration across economies already operating with thin buffers, and any erosion of central bank credibility at a time when inflation expectations are under pressure. On the upside, a sustained AI productivity dividend and renewed momentum on structural reform could provide meaningful support to global economic activity.

Trade and policy uncertainty continue to shape the global outlook, influencing investment decisions, supply chain strategies and capital flows. At the same time, structural drivers such as digitalisation, artificial intelligence and automation continue to support productivity and long-term competitiveness, although benefits remain unevenly distributed. The global economy in 2026 is expected to remain stable but increasingly vulnerable to downside risks, underscoring the importance of policy coordination, resilience and risk management.

INDIAN ECONOMY

India continues to remain one of the fastest growing major economies, demonstrating strong momentum despite a challenging global environment. According to the National Statistical Offices latest estimates, real GDP growth is projected at 7.7% in FY 2025- 26, supported by robust performance across manufacturing and services. The IMFs April 2026 outlook reinforces this trajectory, noting that Indias growth for 2025 has been revised upward to 7.6%, driven by stronger-than-expected performance across recent quarters. Growth for 2026 is projected at 6.5%, supported by carryover from the strong 2025 outturn and easing trade pressures, and is expected to remain at 6.5% in 2027.

Although Indias external position came under moderate pressure in the latter part of FY26. The Indian rupee depreciated against the US dollar, falling to approximately H95/USD by the end of March 2026, driven by foreign portfolio outflows and financial market volatility triggered by the onset of the Middle East conflict. Foreign exchange reserves declined to approximately $698 billion from a peak of nearly $730 billion in late February.

The deeper structural story, however, is defined by a powerful demographic and social transition reshaping Indias internal consumption landscape. A rapidly expanding middle class, rising female workforce participation, increasing digital adoption, and the growing aspirations of a young, urban population are collectively generating durable structural demand and policy measures, even as global growth moderates. While disruptions in the Middle East may weigh on parts of Asia through tourism and remittance channels, Indias strong domestic fundamentals position it as a key contributor to global economic activity.

A. INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian Media and Entertainment (M&E) industry is one of the important sectors for the Indian economy and continues to make significant strides. The Indian M&E sector is witnessing transformative growth in 2025, driven by cutting-edge technology adoption, a surge in regional content demand, and the convergence of traditional and digital platforms.

The industry is increasingly shifting towards digital platforms, with streaming services and social media playing a central role in content consumption.

Indias Media & Entertainment (M&E) industry grew 9% in 2025 to reach ?2.78 trillion, with digital media crossing ?1 trillion in revenues for the first time. The sector is projected to expand further in 2026, driven by digital advertising, live events, and large-screen consumption.

The year 2025 marked a pivotal inflection point for Indias Media & Entertainment industry, as it entered a new phase of scale, innovation and transformation. Beyond growth in numbers, this year reflected evolving audiencesengagement with the convergence of technology with storytelling.

Indias M&E sector crossed a critical inflection point in 2025, when digital advertising crossed 63% of total spends and digital subscriptions exceeded 140 million households. This milestone marked not just a redistribution of budgets but a fundamental restructuring of the media value chain.

The Indian M&E sector grew by INR232 billion to reach INR2.78 trillion, exceeding Indias nominal GDP per-capita growth of 7.7%. The M&E sector contributes around 0.8% of Indias GDP, provides direct employment to around 2.75 million people, and indirect employment to over 10 million people. Digital advertising grew 26% to reach INR947 billion in 2025, as several advertiser categories shifted ad spends from traditional to digital media, led by FMCG, travel and pharma.

In 2026, the sector is now entering the post-inflection phase—one that is defined by accelerated disruption, rapid platform convergence and new value-creation models. Digitals dominance is reshaping content formats, platform strategies, redefining ratings, audience measurement, monetization models and operating structures across the entire ecosystem. The result is an industry that is more converged, data-led and commerce-integrated one poised for exponential growth, but demanding strategic reinvention.

The integration of AI-powered search engines across media and entertainment platforms is fundamentally reshaping user experiences by delivering highly personalized content recommendations. Advanced AI-driven algorithms have enhanced recommendation accuracy by approximately 28%, resulting in measurable improvements in audience engagement. This heightened performance not only strengthens user interaction but also contributes to the expansion of the overall consumer base, thereby exemplifying the industrys sustained commitment to technological innovation and strategic growth.

Digital media has emerged as the primary growth engine, contributing a majority share of advertising revenues, with strong momentum across OTT, social media, gaming, and e-commerce-led advertising. Indias consumption landscape is increasingly mobile-first and on-demand, supported by a large and growing digital user base and rising demand for regional and vernacular content.

Digital media grew by a phenomenal 30% in 2025, solidifying its position as the primary engine of the Indian M&E sector. Digital media became the first M&E segment to cross INR1 trillion (INR1 lakh crore). Driven by premium sports and major movie releases transitioning behind paywalls, digital subscription revenues surged by 60% to reach INR 163 billion. For the second consecutive year, digital media remained the largest segment in the industry, crossing the historic INR 1.11 trillion milestone and far outpacing television. While subscriptions are expanding rapidly, the Indian market remains overwhelmingly advertising-driven, with digital ad spend jumping 26% to INR 947 billion— commanding 63% of all Indian advertising. This relentless digital engagement continues to fundamentally rewrite content monetization strategies across both global giants and emerging e-commerce platforms.

MEDIA GROWTH ESTIMATES*

Segment	2022	2023	2024	2025	2026E	2028E	CAGR 2025 2028
Digital Media	571	686	851	1,110	1,301	1,640	14%
Television	726	711	679	617	587	535	-5%
Print	250	259	257	259	264	264	1%
Online gaming and Video game	222	236	236	195	74	92	-22%
Filmed Entertainment	172	197	187	205	224	253	7%
Animation and VFX	107	114	103	105	113	138	10%
Live events	73	88	101	145	140	196	10.2%
Out of Home Media	48	54	59	67	74	85	8%
Music	46	54	53	59	64	75	9%
Radio	21	23	25	23	23	22	-2%
Total	2237	2422	2553	2,785	2,862	3,301	6.0%
Growth	23.3%	8.3%	5.4%	9.1%	2.8%

All figures are gross of taxes (INR in billion) for calendar years EY Report 2026 estimates

Indian Digital Media Landscape

India continues to be one of the fastest-growing digital media markets in the world. With over a billion broadband subscriptions, India has the second largest broadband subscriber base in the world, after China. With an internet user base crosses 950 million in 2025. The Growth of e-commerce and point-of-sale advertising, which provides rich consumer data to enable segmentation and attribution accuracy across Indias top 50 million affluent households. Which means around 30 million to 40 million additional smartphone users. Digital advertising is expected to lead the growth, adding INR446 billion as large organizations and SMEs continue to invest in high-attribution e-commerce, shoppable and point-of-sale advertising, and Connected TVs grow from 40 million to 67 million connections. Its also Growth in active Connected TV homes to around 67 million by 2028.

The digital media segment is expected to grow at a CAGR of 14% and reach INR1,640 billion by 2028. In the same line the Programmatic advertising contributed 42% of Indias digital spend, growing 19% over 2024, and we expect it to reach a 70% share by 2028 at a CAGR of 18.8%. Under Demographics and behavioral data based on Pan-India survey of 3,000+ smartphone users.

The proliferation of affordable 4G and 5G connectivity, particularly in non-metro regions, has significantly expanded the audience for Hindi-language digital content. The Company is uniquely positioned to leverage this structural tailwind, with its core content offerings in Hindi targeting the countrys most populous linguistic demographic— estimated at over 600 million speakers.

YouTube & Short-form Video Economy

YouTube remains the dominant video platform in India with over 500 million monthly active users. Ad revenue sharing, channel memberships, Super Thanks, and sponsored content have created a vibrant creator economy. News, entertainment, and sports genres consistently rank among the top content categories by viewership hours, directly benefiting the Companys multi-channel YouTube strategy.

Short-form video (Reels on Instagram, YouTube Shorts) has emerged as a powerful discovery and distribution tool, helping channels drive subscriber acquisition and brand awareness at lower cost-per-engagement compared to traditional digital advertising.

Connected TV (CTV) - An Emerging Frontier

The CTV segment is witnessing exponential growth in India, driven by falling Smart TV prices, rising disposable incomes, and the proliferation of broadband home connections. Industry reports estimate that Indias CTV household base crossed 60 million in 2025, with smart TV shipments consistently growing year-over-year. For digital media companies, CTV represents a premium inventory channel with higher CPMs (cost per thousand impressions) compared to mobile, making it an attractive revenue stream. The Companys early-mover presence on Samsung, LG, Xiaomi, and Waves platforms provides a competitive advantage in securing this premium audience. The Growth in average monthly video views on Connected TV is 17% under which y-o-y increase in active Samsung smart TVs in India is approx. 25%.

Social Media Advertising Dynamics

Social media advertising in India witnessed healthy doubledigit growth in FY 2025-26. Facebook and Instagram (Meta platforms) continue to dominate social media ad spends, while X (formerly Twitter) remains influential for political, news, and sports discourse. The growing adoption of e-commerce via social commerce and increased brand marketing budgets from FMCG, BFSI, EdTech, auto, and gaming sectors have expanded the monetization possibilities for media pages with large, engaged audiences.

Regulatory Environment

The digital news and content sector in India operates under the oversight of the Ministry of Information & Broadcasting (MIB), Press Council of India guidelines, and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. The Company is committed to full compliance with applicable regulations, including content ethics codes, publisher registration requirements, and data privacy obligations under the Digital Personal Data Protection Act, 2023 (DPDPA). The evolving regulatory landscape is closely monitored, and appropriate compliance frameworks are in place.

International Market Opportunity

The global Indian diaspora, estimated at over 32 million people across the USA, UK, Canada, Australia, the Gulf nations, and Southeast Asia, constitutes a significant addressable market for Hindi and English digital content. Platforms such as YouTube and Facebook facilitate direct, borderless content distribution, enabling the Company to generate advertising revenues from international digital ad markets—particularly the USA and UK, where CPMs are significantly higher than domestic benchmarks. This international monetization strategy enhances revenue quality and diversifies earnings. AI Momentum in Indias M&E Sector Indian media firms are increasingly using AI, particularly for content creation and processing, with 60% of surveyed companies having adopted it. With 75% of respondents noting a measurable impact, AI has transitioned from experimentation to delivering concrete business value. 67% of respondents reported cost reduction as the key benefit of implementing AI.

AI budgets remain meaningful but conservative for most firms, with 46% of respondents allocating less than 5% of their IT budget to AI. As a result, spend is focused on near-term, high confidence use cases while organizations build stronger data, capabilities, operating models and ROI evidence before they plan to scale.

Content operations will become the most experimented and prioritized area for AI enablement within media organizations, as 80% of respondents continue to believe it still has not been efficiently automated. Priorities for the year ahead will center on enabling AI in core workflows, with firms focusing investment on content creation, operations and distribution to unlock repeatable, scalable value.

AI adoption is strongest in core content workflows, with content creation and content processing leading adoption at 60% of respondents each. Core implementation was around standardized workflows, repetitive tasks and multi language requirements that made automation valuable and efficient, resulting in faster turnaround times and low-mid production cost reduction opportunities.

AI is fast extending across the content lifecycle, with:

• 47% of respondents reported AI usage in content planning and greenlighting

• 40% in distribution and marketing

This signals that most firms are taking a measured investment approach, allocating limited AI budgets while they assess nighttime value and strengthen the foundations needed for broader deployment.

INDUSTRY SIZE AND PROJECTION

Everyone wants to stay entertained, especially in a world filled with economic shifts, and media and entertainment companies are navigating a structural evolution of their own. Following robust post-pandemic spikes, the global industry has moved past its feared deceleration trap, recording a strong 5.3% growth rate in 2025 to reach ? 305.06 trillion in total revenue. Analysts expect the market to stabilize at a sustainable five-year CAGR of 3.4%, driven by a historic inflection point in 2026 where global advertising spend officially eclipses direct consumer spending as the industrys primary economic engine.

Amidst this structural shift, digitalization continues to redefine the media and entertainment industry, offering vital insights into evolving market trends. Companies are aggressively expanding regional and vernacular content to unlock deeper, previously underserved markets. As a result, regional content now drives 56% of OTT consumption. While this hyper-localization has increased overall time spent online, premium content monetization has accelerated, with paid subscriptions growing steadily alongside hybrid, ad- supported tiers that maximize mass-market revenue.

The M&E sector has entered an era of profound structural transformation as organizations seek to maximize relevance across both mass markets and highly targeted niche consumers. Traditional formats like print and broadcasting are experiencing a fundamental shift, with digital media officially cementing its status as the industrys single largest economic engine, crossing the INR 1 trillion milestone. Ultimately, Indian consumers are the primary beneficiaries; empowered by ubiquitous smartphone penetration and

the rapid rise of Connected TVs (CTV), they now enjoy unprecedented flexibility, choice, and absolute centrality within the entire media ecosystem.

The Future shape of Digital Media in India

The digital media segment is expected to grow at a CAGR of 14% and reach INR1,640 billion by 2028. Its growth has been drivers through Smartphone penetration, Connected TVs and simultaneously SME advertising. Digital advertising is expected to lead the growth, adding INR446 billion as large organizations and SMEs continue to invest in high attribution e-commerce, shoppable and point-of sale advertising, and Connected TVs grow from 40 million to 67 million connections Digital subscription revenue is projected to grow by INR85 billion as video OTT subscriptions expand from 143 million to approximately 191 million households. Meanwhile, TVOD revenues are expected to rise from INR5 billion to INR 7.4 billion, and audio OTT subscriptions are set to double, reaching between 28 million and 30 million.

B. STRATEGIC INITIATIVES AND OUTLOOK

Indias Digital sector is set to grow strongly in FY 2026-27. The Digital advertising sector rising 26% to INR947 billion, the segment made up 63% of total ad revenues. E-commerce and point-of-sale ads surged 50% to INR220 billion, which is equivalent to 85% of TV ad revenues. Digital advertising also includes INR363 billion from over a million SME and long-tail advertisers. The Digital subscription revenues increased by 60%, reaching INR163 billion. Paid video subscriptions rose to 216 million, spanning 143 million households in India, driven by the introduction of premium sports and films behind paywalls. Paid music subscriptions expanded by 37% to 14.4 million, following measures by music streaming platforms to discourage free usage. News subscriptions remain limited to only 4 million, primarily due to the abundance of free alternatives available

Overall industry expansion is expected in the range of 6.8%-7.2%, driven by steady consumer demand, continued government investment in digital and broadcast infrastructure, and a gradual pickup in private spending on new projects.

The services side — including television, digital streaming, advertising, and gaming — will remain the main growth engine. At the same time, film production and broadcasting are likely to strengthen as government incentive schemes and private investments translate into higher content output and wider global reach.

Content-First Strategy

The Companys core competitive advantage lies in its quality, speed, and authenticity of content. During FY 2025-26, the Company invested in building a stronger editorial bench, adopting AI-assisted tools for content discovery, trend analysis, and SEO optimization, while preserving the primacy of human editorial judgment. The Editorial Policy framework was strengthened to comply with the IT Rules 2021 and maintain journalistic standards.

Monetization Diversification

The Company has deliberately pursued a multi-stream monetization strategy to reduce dependence on any single revenue channel. In addition to programmatic advertising (the dominant revenue stream for most digital publishers), the Company has been developing:

• Branded Content & Native Advertising: Long-form sponsored content, branded series, and content partnerships with advertisers.

• Video Commerce (V-Commerce): Integration of

product discovery and affiliate commerce links within entertainment content.

• Event Sponsorships: Virtual events, webinars, and award shows sponsored by brand partners.

• Subscription / Freemium: Exploratory stage — select premium content behind a paywall, subscription newsletter, and exclusive journalist access products.

• International Syndication: Licensing of original content to international digital publishers and platforms targeting the Indian diaspora.

Technology Investments

• Migration of website infrastructure to cloud-native architecture for scalability and cost optimization

• Investment in a Video Management System (VMS) to streamline multi-platform content distribution

• Adoption of AI-powered content recommendation engines to increase time-on-site and page views per session

• Data analytics dashboard for real-time audience insights, enabling data-driven content and advertising decisions

• Cybersecurity upgrades and compliance with DPDPA data protection requirements

Geographic Expansion — International Markets

The Indian diaspora in the USA, UK, Canada, Australia, UAE, and other Gulf nations represents a high-value audience that is underserved by existing Hindi digital content providers. The

Companys strategy for international expansion includes SEO localization for diaspora search intent, geotargeted content modules on YouTube and social platforms, partnerships with international Hindi radio and community platforms, and eventual OTT distribution tie-ups in NRI-dense markets. International revenue generates significantly higher CPM rates and represents a margin-accretive growth lever.

CTV Platform Expansion

The Company plans to expand its CTV footprint beyond current platforms to include Amazon Fire TV, Android TV (Google TV), and Apple TV in coming quarters, subject to regulatory and technical readiness. The CTV segment, while currently contributing a smaller share of revenue, is projected to become a significant revenue contributor within 3 years as smart TV household penetration in India is expected to reach 100 million by 2028.

Television Industry in India

Television remains the cornerstone of household entertainment, serving as a powerful medium for shared family experiences and cultural dialogue. The Indian television ecosystem is poised for a new era of growth, propelled by rapid technological advancements, expanding internet penetration, and an accelerating consumer demand for premium, high-quality content. As smart ecosystems mature, we anticipate significant growth opportunities within the Ultra-High Definition (UHD) and Smart TV segments, positioning the market for sustained long-term value creation.

During the year under review, 58% of total viewership was from audiences aged 15 to 50 years, while 23% was from audiences aged 14 years and below, consistent with 2024 levels. Consumption of kids content has moved from television to YouTube and Connected TV in a significant manner, aided by free availability and on-demand access to favorite shows.

Hindi remained the most watched language on television with the 45% share of viewership, witnessing marginal growth from 2024. News consumption continues to fragment across platforms, with rising digital reach driving content diversifications into local, issue based and nonnews format. Hindi news viewership grew by 4% and English News grew by 6%. The top five language like, Hindi, Telugu, Tamil, Kannada and Marathi contributed 81% of the total viewership.

Television remains Indias predominant medium, commanding a massive weekly reach of approximately 745 million individuals. However, the media landscape is undergoing a structural shift. While Connected TV (CTV) viewership is projected to scale to 83 million households

by 2030, linear Pay TV faces intensifying competition for consumer mindshare from digital content, non-broadcaster OTT, and social media platforms. Reflecting these changing dynamics, the total number of television channels expanded in calendar year 2025, driven by a strategic pivot toward Free-to-Air (FTA) channels. Conversely, Pay TV channels contracted, establishing FTA as the dominant segment at 65% of the countrys total channel portfolio.

Total TV households rose to 193 million in 2025, up from 190 million in 2024 and 186 million in 2023, and the report projects the number will cross 200 million within two years. The growth, however, is not where the old industry would recognise it. Free TV expanded from 45 million households in 2023 to 53 million in 2025, with FreeDish alone accounting for the entire free segment. Pay TV and Connected TV combined stood at 140 million, but linear Pay TV shed 11 million subscriptions, losing them to Connected TV and Free TV. The audience is not leaving television. It is leaving the bill.

During the period under review, the total number of television channels in India increased to 956, up from 936 in mid-2024, heavily driven by free-to-air launches. Total TV households reached 193 million, on track to cross 200 million within the next two years, with the audience mix shifting prominently toward Connected TVs (CTV). The ecosystem post-2026 is poised for further disruption as wired broadband approaches 60 to 70 million homes alongside massive 5G scaling. Consequently, connected TVs are projected to scale rapidly to reach 100 million homes by 2030, while traditional linear TV stabilizes, supported strongly by a growing Free TV/ FreeDish base of over 53 million homes.

Indias television industry is not facing a reckoning. It is facing a reorganisation. The households are there, the audiences are there and the appetite is undimmed. What is changing is who captures the money when the screen lights up. Right now, the answer is increasingly Connected TV. In four years, it will be overwhelmingly so.

Total TV subscriptions are expected to grow to 212 million by 2030 (22% of all screens), with three large and important components, each requiring its own product, pricing and windowing strategy. 78% of all screens will be smartphones, keeping demand strong for short-form content, microdramas, social media, mobile gaming, and music streaming.

Television viewership in India during FY2025-26 is under pressure, with declining linear TV audiences, shrinking advertising revenues, and increasing competition from OTT and free platforms. Growth in time spent on television is being shaped by sports events, regional content strength, and regulatory changes, but overall trends point to stagnation or decline.

One of the key challenges is the rapid pace of technological advancements, which requires continuous innovation from manufacturers to stay competitive. This includes the development of 8K resolution TVs and enhanced smart TV functionalities. The rising middle-class population, increased disposable income, and urbanization are driving the growth of the television market in India. The preference for high- quality viewing experiences and the integration of smart technologies in televisions are major growth drivers.

C. COMPANY OVERVIEW AND BUSINESS DESCRIPTION

BAG DIGITAL is a digital-first media enterprise listed on the SME Emerge Platform of the National Stock Exchange of India Limited (NSE). The Company completed its maiden financial year as a listed entity for the year ended March 31, 2026. The Company is engaged in the creation, curation, and distribution of digital content across multiple verticals, platforms, and geographies, serving both domestic and international audiences.

Our Company has inception since 2007, BAG DIGITAL has consistently strengthened its position in Indias digital media landscape through the creation and distribution of high-quality digital content across multiple platforms. The Company has built a diversified digital ecosystem encompassing news portals, digital publishing platforms, social media channels, and mobile-first content, enabling it to engage with a broad and growing audience. Over the years, the Company has focused on enhancing content quality, expanding its digital reach, and adopting evolving technologies to improve user experience and audience engagement.

The Companys recent listing marks an important milestone in its growth journey, providing greater visibility and a stronger platform to pursue strategic expansion opportunities. Going forward, BAG Digital intends to leverage its established brand, experienced management, and digital capabilities to deepen audience engagement, strengthen monetisation through advertising and allied digital solutions, invest in technology and content innovation, and explore new growth opportunities. With over a decade of operating experience and a scalable business model, the Company remains committed to delivering sustainable growth while creating long-term value for its shareholders and other stakeholders.

During the financial year 2025-26, the Company continued to expand its footprint in digital convergence, digital content creation, multi-platform publishing, and technical migration services for broadcasters transitioning to digital ecosystems. The digital business maintained robust operational efficiency, driven by increased audience reach, programmatic monetization, and localized/regional content delivery across web, mobile, and social platforms.

Core Business Verticals

1. News & Information (Hindi)

• Operates leading Hindi-language, digital news websites with 24x7 coverage of national, regional, and international news.

• Offers breaking news, opinion, analysis, investigative journalism, and multimedia storytelling.

• Hindi news platform targets Tier I, Tier II, and Tier III cities and towns, tapping into Indias vast Hindi-speaking demographic.

2. Entertainment & Bollywood (Hindi)

• Dedicated Hindi entertainment website covering Bollywood, celebrity news, film reviews, web series, OTT content updates, lifestyle, and fashion.

• Rich mix of user-generated content (UGC), branded content, exclusive interviews, and video-led storytelling.

3. YouTube Channel Ecosystem

• National Hindi News Channel: Covers major national events, politics, economy, and governance.

• Regional News Channels: Hyper-local coverage catering to specific states and linguistic sub-groups within the Hindi belt.

• Sports Channel (Hindi): Dedicated to cricket, football, kabaddi, and emerging sports with commentary and analysis in Hindi.

• Entertainment & Bollywood Channel: Movie trailers, film reviews, celebrity interviews, award show coverage, and viral pop-culture content.

• Collective subscriber base spanning millions, with consistent viewership growth driven by mobile-first audiences.

4. Social Media Platforms

• Facebook: Significant presence with large follower communities across news, entertainment, and sports pages; monetized through in-stream ads and branded partnerships.

• Instagram: Visual-led content strategy including Reels, Stories, and carousels targeting younger demographics (18-35 years).

• X (formerly Twitter): Real-time news, trending commentary, and audience engagement for political and sports discourse.

• Other emerging platforms as per market adoption trends.

5. Connected TV (CTV)

• Distribution on leading Smart TV operating systems and platforms including Samsung Tizen TV, LG webOS, Xiaomi Mi TV, and Waves Smart TV.

• Content delivered via apps on the respective TV app stores, capturing premium household audiences engaging with long-form video content on large screens.

• CTV complements mobile-first distribution by reaching family viewing demographics in urban and semi-urban India.

D. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company has prepared its audited financial statements as per Indian Accounting Standards (Ind AS) for the financial year 2025-26. The performance of the Company for the year under review along with previous year figures are given below:

(? in Lakhs)

Particulars	Financial Year
	2025-26	2024-25
Total Income	4,434.57	3,585.14
Total Expenditure other than Financial Costs and Depreciation	2,494.54	2,185.68
Profit before Depreciation & Financial Charges (EBIDTA)	1,940.03	1,399.46
Financial Charges	156.73	49.97
Depreciation and Amortization Expense	305.89	85.44
Profit before Tax	1,477.41	1,264.05
Provision for Tax	400.34	323.39
Profit after Tax	1,077.07	940.66

The details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Account and other financial statements appearing separately.

E. SEGMENT WISE PERFORMANCE

The Company is engaged in the digital media industry, primarily undertaking activities relating to digital content, media and allied services. During the financial year under review, the Company continued to focus on strengthening its presence in the digital media space, expanding its business opportunities and improving its operational capabilities. The Company remains committed to leveraging the growing adoption of digital platforms and evolving consumer preferences to support sustainable business growth.

The Company operates predominantly as a single business segment, and its activities are substantially integrated and interrelated. There are no separately identifiable business or geographical segments that require separate disclosure in terms of AS-17 hence segment wise reporting is not applicable.

F. OPPORTUNITIES AND THREATS

The Indian digital media industry is buzzing with potential and driven by a combination of factors such as digital transformation, increasing internet penetration, and a diverse and dynamic consumer base. However, the industry also faces several challenges that could impact its growth trajectory. This note provides a detailed analysis of the opportunities and threats in the Indian digital Media industry.

Opportunities

Here is segment wise breakdown of the key opportunities in digital media Industry:

• Growing digital audience and ad spend: More people in India are watching news, entertainment, and short videos on phones, Smart TVs, and OTT apps. This creates scope to earn more from ads, branded content, and partnerships.

• Better monetisation tools: Using programmatic ads, AI-based content optimisation, and multiformat IP (news, entertainment, sports capsules) can improve revenue per viewer and fill rates across platforms.

• Regional and local content: There is strong demand for Hindi and other regional-language content. Expanding into new regional markets and hyperlocal programming can attract fresh audiences and advertisers.

• Creator economy and collaborations: Indias creator base is large and growing, with brands spending more on influencer and creator-led campaigns. Partnering with creators and offering production/tech support can open new B2B and B2C revenue streams.

• Partnerships and distribution: Tie-ups with OTT platforms, telecom players, Smart TV ecosystems, and social platforms can widen reach, improve engagement, and reduce cost of acquiring users.

• New infrastructure and governance: Setting up modern digital studios, content labs, and strong compliance/disclosure practices can support scale, quality, and investor confidence as a listed company

Threats

Heres a detailed breakdown of the key challenges and threats facing digital media segments of Indias Media and Entertainment industry:

• Ad revenue can go up and down : A large part of income comes from advertising, which can fall in weak economic periods or when clients cut budgets.

• Dependence on third party platforms: The business relies on platforms like YouTube, Google, Facebook, Instagram, X, and CTV ecosystems for reach and monetisation. Changes in their algorithms, policies, or monetisation rules can reduce views and revenue

• Regulatory changes: Rules for digital media, content standards, data/privacy, and advertising disclosures are evolving. Stricter norms can increase compliance costs or limit certain content/ad formats.

• Content costs and uncertainty: Making good content is costly and not always successful. If content does not match audience tastes or new technologies, it can hurt performance.

• IP and licensing issues: The company needs proper rights and licenses for text, images, videos, and music. Delays or gaps can lead to takedowns, legal issues, or reputational harm.

• Customer concentration and competition: A significant share of revenue comes from a small set of top customers, and competition from both traditional media and new digital players is intense, which can pressure margins.

• Cyber and operational risks: Digital content and streaming can be affected by hacking, unauthorized access, or facility disruptions, which may impact operations and finances.

G. RISK AND CONCERNS

The digital media industry operates in a dynamic and highly competitive environment, influenced by rapid technological advancements, evolving consumer preferences, and changes in the regulatory landscape. The Companys business performance may be impacted by increasing competition from established media houses, digital-first publishers, and global technology platforms competing for audience attention and advertising revenues.

A significant portion of the Companys revenue is linked to advertising and marketing expenditure, which is influenced by overall economic conditions and business sentiment. Any slowdown in economic activity or reduction in advertising budgets may adversely affect revenue growth. The Company also faces risks associated with frequent changes in search engine and social media platform algorithms, which may impact audience reach and digital traffic.

As part of its risk management framework, the Company identifies, monitors, and seeks to mitigate the following categories of risk:

Platform Dependency Risk

A substantial portion of the Companys traffic and video revenue is generated through third-party platforms— YouTube, Facebook, and Google. Changes to algorithms, monetization policies, content moderation standards, or ad revenue-sharing arrangements by these platforms can materially impact the Companys revenues and audience reach. The Company mitigates this risk by diversifying across platforms, investing in owned-and-operated (O&O) digital properties (websites and CTV apps), and building direct audience relationships through newsletters and push notifications.

Competitive Intensity

The digital media landscape in India is highly competitive, with established media conglomerates, well-funded digital natives, and a large universe of independent creators on YouTube and social media all competing for audience attention and advertising budgets. The Company differentiates through hyper-local Hindi content focus, multi-format capabilities (text, video, social, CTV), and quality journalism credentials.

Advertiser Concentration Risk

Dependence on a limited number of large advertisers or advertising intermediaries (ad networks and DSPs) for a significant portion of revenue creates concentration risk. The Company is actively working to diversify its advertiser base by expanding its direct sales team and reducing dependence on programmatic intermediaries.

Regulatory and Compliance Risk

The digital news and content sector is subject to evolving regulations including the IT Rules 2021, the Cable Television Networks (Regulation) Act (in context of OTT/

CTV), and the DPDPA 2023. Non-compliance or adverse regulatory developments could result in fines, content removal, or operational disruptions. The Companys compliance team monitors regulatory changes proactively.

Technology and Cybersecurity Risk

Digital media operations are exposed to cybersecurity threats including DDoS attacks on websites, data breaches, and ransomware. The Company has invested in cybersecurity infrastructure, regular vulnerability assessments, and data protection frameworks to mitigate these risks.

Talent Retention Risk

The market for quality editorial, technology, and digital advertising talent is competitive. Attrition of key personnel could affect content quality and business continuity. The Company addresses this through competitive compensation, equity-linked incentives, and a positive work culture emphasizing editorial independence and professional growth.

Macroeconomic Risk

Digital advertising spend is correlated with macroeconomic conditions. An economic slowdown, reduction in corporate advertising budgets, or decline in FMCG / BFSI / auto sector spends could compress CPMs and overall ad revenues. Geographic and vertical diversification of the advertiser base provides a buffer against cyclical downturns.

H. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a robust internal control framework, commensurate with the size and nature of its business operations. These controls are designed to address governance, compliance, audit, control, and reporting concerns that may impact its operations. These internal controls play a vital role in ensuring regulatory compliance, protecting assets, preventing fraud, and ensuring the accuracy of financial reporting. The Companys internal auditors are responsible for regularly monitoring and evaluating the effectiveness of these internal control systems. Any significant findings are promptly reported to management for swift corrective action.

The Audit Committee of the Board of Directors is active in checks and balances that ensure the adequacy and effectiveness of the internal control systems. This committee suggests improvements to strengthen the internal controls and ensure their ongoing effectiveness.

The CMD/CFO Certification provided elsewhere in the report discusses about the adequacy of our internal control systems and procedures.

Listing and Regulatory Compliance

As a newly listed SME entity on the NSE Emerge Platform, the Company has implemented governance structures appropriate for a listed company, including a qualified Board of Directors with independent directors as required under SEBI (LODR) Regulations 2015, an Audit Committee, Nomination and Remuneration Committee, and Stakeholders Relationship Committee. Timely disclosures to the stock exchange, compliance with related party transaction norms, and adherence to the insider trading prevention code are rigorously maintained.

Editorial Compliance

The Company adheres to the editorial standards prescribed under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, including the establishment of a Grievance Redressal Mechanism, appointment of a Grievance Officer, and compliance with the three-tier self-regulatory architecture for digital news publishers. A comprehensive Editorial Policy framework is in place governing content standards, fact-checking, and corrections protocols.

Data Privacy

With the enactment of the Digital Personal Data Protection Act, 2023 (DPDPA), the Company has undertaken a data privacy audit of its websites, social media integrations, and CTV apps. A data privacy policy has been updated and published across all digital properties. User consent mechanisms and data retention policies are being reviewed and aligned with DPDPA requirements ahead of the Acts full operationalization.

I. MATERIAL DEVELOPMENT IN HUMAN RESOURCES

BAG DIGITAL considers Human Resources to be one of the key elements to sustain competitive advantage in the News Media Sector. Media organizations are human driven; its growth depends upon the quality contribution made by the people in the organization. Therefore, your Company recognizes human resources as a key component for facilitating organizational growth.

BAG DIGITAL understands that the M&E industry is rapidly evolving and it is crucial to keep up with the latest trends and technologies to stay competitive. The Company provides regular training and development programs to its employees to ensure that they are equipped with the necessary skills and knowledge to perform their roles efficiently. These programs include on-the-job training, mentoring, coaching and leadership development programs.

BAG DIGITAL aims to recruit, nurture and retain quality professionals and provide them with a high performance environment. Knowledge and intellectual assets are being strategically shared across BAG DIGITAL. At BAG DIGITAL, we have understood the potential of the human resource and its contribution to the financial standing of your company. Therefore, the human asset is highly valued and regarded by your company.

The Companys workforce as of March 31, 2026 comprised 233 employees including contractual / freelance content creators and journalists. Key focus areas included editorial talent acquisition for regional content expansion, technology talent (product managers, data analysts, engineers), and a dedicated digital advertising sales team. The Company also invested in structured training programs for editorial staff, technology upskilling, and compliance training.

We would like to thank all our employees for their contribution and we look forward to their continued support in maintaining our leadership position in the industry. We would also like to thank all our shareholders for continuing to trust and believe in the Company and look forward to your continued support as we scale new heights with BAG DIGITAL.

J. KEY FINANCIAL RATIO

As per the SEBI Listing Regulations, the Company is required to give details of significant changes (i.e. 25% or compared to the immediately previous financial year in key-sector-specific financial ratio. The Company has significant changes in key financial ratio during FY 2024-25 and FY 2025-26. Details of movement in key financial ratios are here under:

(? in Lakhs)

Particulars	2025-26	2024-25	Growth (in %)	Reason of Changes
Revenue from Operation	4,320.61	3,563.35	21.25	1. The Expenses have not increased in the proportion of which revenue from operation & financial activity increases. This results in increase in EBIDTA by 38.63% 2. The Increase in current ratio is due to unspent money of the proceeds from IPO during the Financial Year lying in Bank. 3. i. The reason for decrease in Debt Equity ratio is allotment of new 56,00,000 Equity Shares to public on SME NSE Platform. ii. The decline in the interest coverage ratio is due to increase in operating earnings. iii. Inventory turnover ratio increased from last year because of increase in the inventory of content (finished and semifinished) by 5.01 Cr. 4. Decline in the return on net worth is due to increase in the share capital after allotment of 56,00,000 new equity shares during the FY 2025-26 to public through IPO.
Gross Margin	88.19	100	(11.81)
EBIDTA	1,940.03	1,399.46	38.63
PBT	1,477.41	1,264.05	16.88
PAT	400.34	323.39	23.79
Current Ratio	5.06	2.14	136.53
Net Profit Margins	24.93	26.39	(5.57)
Debt Equity Ratio	0.23	0.57	(60.32)
Interest Coverage Ratio	10.43	26.29	(60.33)
Return on Net Worth	21.73	64.17	(66.14)
Debtors Turnover	2.92	3.43	(15.02)
Inventory Turnover	9.99	4.95	101.82

Cautionary statement

We acknowledge that certain projections within this discussion are forward-looking and may be subject to variations due to dynamic factors such as regulatory shifts, economic fluctuations, and market competition. Our analysis includes internal estimates regarding market size and growth rates across various segments, other internally developed data, publicly available information, and additional sources the Company considers reliable. We also remain committed to transparency and aim to provide stakeholders with a comprehensive understanding of our financial trajectory and strategic initiatives, ensuring sustainable growth and value creation.

Factors that could affect the Companys actual results include, but are not limited to, general economic and business conditions in India and globally, changes in digital advertising market dynamics, platform policy changes by technology companies, competition, the ability to attract and retain talent, regulatory developments, technology disruptions, and the successful execution of strategic plans.

(*Source of information: Stories, Scale and impact unlocking Indias Media and Entertainment Economy, FICCI-EY-Report 2026)