Baweja Studios Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

FY 2025-26

Creative ambition. Technology-led execution. Financial discipline.

Responsible growth.

EXECUTIVE OVERVIEW

A year of industry recovery, portfolio execution and disciplined transition

FY 2025-26 unfolded against an improving Indian media and entertainment backdrop. FICCI- EY reported that Indias overall M&E sector grew 9% in calendar year 2025 to Rs.2.78 trillion, while filmed entertainment revenue also grew 9% to a record Rs.205 billion. Ormax Media reported a record Rs.13,395 crore India gross box office in 2025, followed by a strong January- March 2026 period of Rs.3,440 crore, 17% above the corresponding prior-year period.

For Baweja Studios Limited, the year reflected the project-based nature of content production and delivery. On a consolidated basis, revenue from operations was Rs.6,893.66 lakh compared with Rs.7,557.42 lakh in FY 2024-25. Profit before tax was Rs.822.94 lakh and profit after tax was Rs.607.38 lakh. The moderation in revenue and profitability should be viewed in the context of project completion and delivery cycles, working-capital deployment into the content pipeline and the timing of commercial recognition across productions.

The industry grew. The Company invested, delivered and prepared the next slate - while retaining a disciplined approach to project selection, funding and execution.

Key metric	FY 2024-25	FY 2025-26	Change
Revenue from	7,557.42 lakh	6,893.66 lakh	-8.8%
operations
Total income	7,627.23 lakh	6,951.01 lakh	-8.9%
Profit before tax	1,120.77 lakh	822.94 lakh	-26.6%
Profit after tax	^828.26 lakh	^607.38 lakh	-26.7%

INDUSTRY ENVIRONMENT

Indias M&E ecosystem returned to stronger growth

Indias media and entertainment sector reached approximately Rs.2.78 trillion in 2025, growing 9% year-on-year. Digital media crossed Rs.1 trillion in revenue for the first time, while filmed entertainment reached a record Rs.205 billion. The sector is expected by FICCI-EY to reach approximately Rs.3.3 trillion by 2028, with digital media, live events, filmed entertainment and animation & VFX among the important growth drivers. estimate.

WHAT CHANGED DURING THE YEAR

Digital became structurally larger. Digital media crossed the Rs.1 trillion revenue milestone in 2025, reinforcing the shift toward connected, on-demand and measurable consumption.

Large-screen entertainment remained relevant. FICCI-EY described India as an "AND" market, where digital and large-screen consumption can expand together rather than one simply replacing the other.

Advertising strengthened. Overall advertising revenue increased at a double-digit pace, while digital advertising continued to take share.

FILMED ENTERTAINMENT

A record revenue year for Indian filmed entertainment

Filmed entertainment revenue increased from Rs.187 billion in 2024 to Rs.205 billion in 2025, surpassing Rs.200 billion for the first time. FICCI-EY estimates the segment at Rs.224 billion in 2026 and Rs.253 billion in 2028.

The growth was supported by domestic theatrical performance, a wider slate of releases and international distribution. FICCI-EY reported 1,972 theatrical releases in 2025, including dubbed films, compared with 1,823 in 2024. It also reported 390 Indian films released across 40 international markets, underscoring the increasing ability of Indian content to travel across borders.

For content producers, the opportunity is increasingly multi-window: theatrical, OTT, overseas, broadcast and ancillary monetisation can coexist across the lifecycle of intellectual property.

THEATRICAL MARKET

2025 became the biggest year ever at the India box office

Ormax Media reported India gross box office collections of Rs.13,395 crore in 2025, the first year to cross Rs.13,000 crore and above the previous record of Rs.12,226 crore in 2023. Hindi cinema also recorded its best-ever year at Rs.5,504 crore.

The number of films crossing Rs.100 crore increased to 37 in 2025 from 22 in 2024. At the same time, Ormax reported 832 million footfalls in 2025, 6% lower than 2024, while average ticket price rose 20% from Rs.134 to Rs.161. This highlights an important industry dynamic: revenue growth is being supported by both successful event content and higher ticket pricing, while audience frequency remains an area for continued industry focus.

Momentum extended into the final quarter of FY 2025-26. Films released during January-March 2026 generated Rs.3,440 crore, 17% above the corresponding period in 2025. March 2026 alone generated Rs.1,690 crore, according to Ormax Media.

BUSINESS OVERVIEW

A technology-driven content studio with a multi-format model

Baweja Studios Limited operates as a content production and distribution company focused on script development, end-to-end production, intellectual property creation and monetisation.

The Companys business model combines in-house development, content acquisition, remake and adaptation rights, and project-specific production structures. Projects are evaluated through a multi-level selection process, following which management determines the appropriate production model, including in-house production, co-production or acquisition.

The Companys portfolio spans feature films, web series, digital films, animation and regional- language cinema. This diversification is increasingly relevant in an industry where audiences move fluidly between theatres, streaming platforms and languages.

TECHNOLOGY AND PRODUCTION EVOLUTION

The Company continues to evaluate the responsible use of emerging technologies across development and production, including AI-assisted workflows, advanced VFX, animation, virtual production and data-supported audience insight. The objective is to enhance productivity, visual possibilities and decision quality while protecting the primacy of creative judgement, rights management and appropriate governance.

FY 2025-26 OPERATING CONTEXT

The year included activity across theatrical and digital content. The Companys project economics remain influenced by the timing of production milestones, completion, delivery and contractual revenue recognition. Accordingly, year-on-year financial movement may not mirror broad industry growth in any single period.

FINANCIAL REVIEW

Performance reflects delivery timing and continued investment in the content pipeline

REVENUE

Revenue from operations decreased by 8.8% to Rs.6,893.66 lakh from Rs.7,557.42 lakh. Total income was Rs.6,951.01 lakh compared with Rs.7,627.23 lakh. Given the project-led nature of the business, revenue recognition is linked to the timing of contractual deliveries and completion milestones rather than a uniform monthly production cycle.

PROFITABILITY

Profit before tax was Rs.822.94 lakh compared with Rs.1,120.77 lakh, while profit after tax was Rs.607.38 lakh compared with Rs.828.26 lakh. PBT margin moderated to 11.9% from 14.8%, and PAT margin was 8.8% compared with 11.0%.

COST STRUCTURE

Operational expenses reduced to Rs.5,474.69 lakh from Rs.5,891.30 lakh. Finance costs increased to Rs.301.89 lakh from Rs.190.89 lakh, reflecting higher borrowing levels and financing requirements associated with the operating cycle. Employee benefit expense increased to Rs.68.30 lakh from Rs.55.21 lakh as the Company continued to strengthen organizational capabilities.

FINANCIAL CONDITION

Working capital remained central to the production cycle

Inventories increased to Rs.8,795.67 lakh from Rs.6,989.91 lakh, consistent with deployment into projects at various stages of development and production. Trade receivables reduced to Rs.5,849.94 lakh from Rs.7,167.62 lakh, reflecting improved conversion of receivables during the year.

Total borrowings increased to approximately Rs.3,840.74 lakh from Rs.3,113.46 lakh. Based on reported current assets and current liabilities, the current ratio was approximately 2.11x at 31 March 2026 compared with 2.42x at 31 March 2025. Borrowings-to-equity was approximately 0.37x compared with 0.28x in the prior year. These movements underline the importance of working-capital planning and disciplined project funding as the content slate scales.

CASH FLOW

Net cash used in operating activities improved materially to Rs.514.79 lakh in FY 2025-26 from Rs.6,953.00 lakh in FY 2024-25. The improvement was driven by a significant release from trade receivables and other financial assets, partly offset by higher inventories and movements in provisions and payables. Net financing inflow was Rs.419.41 lakh, while cash and cash equivalents at year-end were Rs.110.94 lakh.

OPPORTUNITIES

Where the Company sees structural opportunity

Multi-format demand - The coexistence of theatrical, digital and long-form streaming creates multiple routes to audiences and counterparties.

Regional and multilingual storytelling - Audience acceptance across languages expands the addressable market for strong concepts and adaptable intellectual property.

Strategic partnerships - Co-productions and platform relationships can broaden distribution, share capabilities and improve access to talent and markets.

Technology-enabled production - AI-assisted development, advanced VFX, animation, virtual production and data tools can improve speed, iteration and production visibility when deployed within clear governance frameworks.

International reach - The growing number of Indian films released internationally supports the potential for cross-border collaboration, overseas monetisation and global audience development.

IP-led growth - Franchises, sequels, adaptations and owned concepts can extend the economic life of successful stories across formats and territories.

RISKS & THREATS

Creative businesses require disciplined risk management

Content performance risk - Audience reception is inherently uncertain and can affect theatrical, licensing and ancillary monetisation.

Project concentration and timing - Revenue can vary materially depending on the completion, delivery and release timing of a limited number of projects.

Working-capital intensity - Productions require upfront deployment before contractual receipts are realised, making cash-flow planning and funding discipline critical.

Cost inflation - Talent, production, VFX, location and marketing costs can increase project budgets and pressure returns.

Platform and buyer economics - OTT and broadcast buyers continue to focus on profitability, selectivity and return on content investment, affecting acquisition behaviour and rights pricing.

Piracy and IP protection - Unauthorized exploitation can impair monetisation and brand value.

Technology and AI governance - Emerging tools create efficiency opportunities but also require attention to copyright, consent, data protection, provenance, security and quality control.

Regulatory environment - Content regulation, certification, digital rules, taxation and crossborder requirements may evolve and affect operations.

Talent and execution - The ability to secure creative talent and execute complex productions on time and within budget remains central to project outcomes.

GOVERNANCE, CONTROLS & FINANCIAL DISCIPLINE

Innovation within an accountable operating framework

As a listed company, Baweja Studios seeks to balance the entrepreneurial nature of content creation with appropriate oversight, financial controls and governance processes. Project evaluation, budgeting, contracting, cost monitoring, rights documentation, revenue recognition and working-capital management form important parts of this framework.

The Companys financial results for FY 2025-26 were prepared in accordance with applicable Indian Accounting Standards and approved by the Board following review by the Audit Committee. The statutory auditors report on the consolidated annual financial results states that the results give a true and fair view in conformity with applicable accounting standards and regulatory requirements.

TECHNOLOGY GOVERNANCE

The same discipline is increasingly relevant to new production technologies. The use of AI and digital tools should be governed by clear approval processes, legal and rights checks, confidentiality safeguards and human creative oversight. The objective is to capture efficiency and innovation without compromising intellectual property, quality, contractual obligations or stakeholder trust.

At Baweja Studios, innovation is an enabler - governance remains the framework within which it is scaled.

SOURCE NOTES

?€? FICCI-EY, Stories, Scale and Impact: Unlocking Indias Media and Entertainment Economy, March 2026.

?€? Ormax Media, The Ormax Box Office Report: 2025, January 2026; The India Box Office Report: March 2026, April 2026.

?€? Baweja Studios Limited, Consolidated and Standalone Audited Financial Results for the year ended 31 March 2026.

?€? Baweja Studios Limited Annual Report 2024-25, used as the structural reference for this MD&A draft.

CAUTIONARY STATEMENT

Certain statements in this Management Discussion and Analysis may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ materially due to economic conditions, audience preferences, project schedules, production and financing risks, platform and distribution decisions, regulatory developments and other factors. Industry estimates are drawn from third-party reports and may use calendar-year methodologies that differ from the Companys financial year. The Company undertakes no obligation to update forward-looking statements except as required by law.

Editorial note for publication: Third-party charts in this draft have been redrawn from publicly reported data and source-attributed. If the Annual Report design team wishes to reproduce original EY or Ormax report artwork/screenshots, publication permissions and brand/source requirements should be checked before final printing.