Connplex Cinemas Ltd Management Discussions

Global economy

The global economy maintained stable growth momentum of around 3.4% in 2024-2025, supported by resilient services demand, technology-driven investments (particularly in AI), and accommodative financial conditions across several major economies. However, entering 2026, that outlook moderated amid rising geopolitical tensions and renewed supply-side shocks, particularly following the February 2026 Middle East conflict.

Under the IMFs April 2026 outlook, global GDP growth is projected at 3.1% in 2026 and 3.2% in 2027, marking a modest slowdown from recent years. At the same time, global inflation, which started easing during 2024-25, is expected to rise temporarily to 4.4% in 2026, driven by a surge in energy and food prices, before declining again in 2027.

Global Growth Projections (%)

Region	2024	2025	2026 E	2027 E
World	3.4	3.4	3.1	3.2
Advanced Economies	1.7 - 1.8	1.9	1.8	1.7
EM & Developing Economies	4.3-4.4	4.4	3.9	4.2
Middle East & Central Asia	3.2	3.6	1.9	4.6

Major Economics - GDP Growth ( % )

Economy	2024	2025	Key Drivers (2025)
United States	2.0	2.1	Tech investment, fiscal support, resilient consumption
China	5.2	5.0	Strong exports, weak domestic demand
United Kingdom	0.5-0.7	1.3	Recovery post slowdown, domestic demand
Japan	1.5	1.2	Consumption rebound, stimulus measures
Germany	(-0.2)	0.2	Weak manufacturing, gradual improvement

Global Outlook

The global economy is currently on a path of moderate but increasingly fragile growth, as the momentum built from post-pandemic recovery and technology-driven investment is being disrupted by rising geopolitical tensions, particularly the recent conflict in the Middle East. While global output continues to expand at a modest pace, inflation has temporarily edged up again due to higher energy and food prices, interrupting the earlier trend of disinflation. Economic performance remains uneven across regions, with advanced economies growing slowly and emerging markets more vulnerable to external shocks such as higher commodity prices and tighter financial conditions. At the same time, underlying structural forces such as trade fragmentation, rising public debt, and shifting global alliances are weighing on long-term prospects, even as technological advancements like artificial intelligence offer potential support to productivity and growth. Overall, the outlook is characterised by resilience in the face of shocks, but with clear downside risks dominating, largely driven by uncertainty around geopolitics, energy markets, and financial stability.

Source: IMF April 2026 Report

Indian economy

The Indian economy is currently exhibiting strong and sustained growth momentum, driven primarily by robust domestic demand, rising investment activity, and strengthening performance across manufacturing and services sectors. According to the latest national accounts estimates, real GDP growth is projected at around 7.6% in FY 2025-26, improving from 7.1% in FY 2024-25 and maintaining a consistent growth trajectory above 7% over the past three years, indicating stable macroeconomic expansion. Nominal GDP has also risen steadily, reaching approximately ^345 lakh crore in FY 2025-26, reflecting both real growth and moderate inflationary effects in the economy.

The structure of the Indian economy continues to be dominated by the services sector, which contributes more than half of total economic output, supported by strong expansion in trade, transport, financial services, real estate, and communication activities. The secondary sector, particularly manufacturing and construction, has emerged as a key growth driver with double-digit improvements in certain years, indicating ongoing industrial strengthening and infrastructure development. Meanwhile, the primary sector, although relatively smaller in share, continues to provide a stable base, albeit with comparatively moderate growth.

On the demand side, economic expansion is supported by rising private consumption and investment, both of which have recorded growth rates above 7%, highlighting continued consumer confidence and capital formation. The investment rate remains strong, with gross capital formation contributing significantly to GDP, while savings, particularly from households, have strengthened, thereby improving the domestic resource base for growth. Export performance is improving gradually, although imports remain higher, reflecting strong domestic demand and global integration.

Overall, the Indian economy can be characterised as high-growth, demand-driven, and structurally service- oriented, with increasing support from manufacturing and investment activity. The consistency in growth above 7%, coupled with improving sectoral balance and rising per capita income, indicates resilience and a positive medium-term outlook, despite global uncertainties.

Indias Growth Story

Indias growth story over the past few years is defined by sustained high economic expansion, structural transformation, and strong domestic demand. The economy has consistently grown above 7%, reaching around 7.6% in FY 2025-26, reflecting a stable and resilient growth trajectory despite global economic uncertainties. This performance is largely driven by robust internal factors such as increasing private consumption, rising investments, and improvements in infrastructure development. The services sector remains the backbone of the economy, contributing more than half of the total output, while manufacturing and construction have emerged as key contributors to growth, signalling a gradual strengthening of Indias industrial base. Additionally, strong capital formation, improving household savings, and expanding digital and financial ecosystems have supported productivity and long-term economic capacity. Overall, Indias growth story reflects a transition toward a more diversified, demand- driven, and structurally balanced economy.

Indian Outlook

The outlook for the Indian economy remains optimistic, with growth expected to remain strong and stable in the medium term. Continued expansion is likely to be supported by sustained government focus on infrastructure, digital transformation, and manufacturing development, along with favourable demographic factors such as a young workforce and ongoing urbanisation. Private consumption and investment are expected to remain key growth engines, while services and industrial sectors are likely to continue driving overall economic activity. However, the outlook also depends on managing risks such as global economic slowdown, commodity price volatility, and external shocks that could affect trade and capital flows. Domestically, maintaining inflation stability, improving employment generation, and strengthening productivity will be critical to sustaining high growth momentum. In summary, Indias outlook points to continued strong expansion with growing economic depth, making it one of the most important contributors to global growth in the coming years. Source: MOSPL Feb 2026 Report

Overview of Global Film Exhibition Industry

The global media and entertainment (M&E) industry continues to witness steady expansion, supported by rapid digital consumption, increased technology integration, and evolving audience preferences. It is widely recognised as a multi-trillion-dollar sector, with strong momentum driven by the growth of digital media, streaming platforms, and immersive live experiences across global markets.

India is emerging as a key contributor within this global ecosystem, owing to its large-scale content production, expanding consumer base, and rapid digital adoption, which together position the country as both a major consumption hub and an increasingly important content creation centre. Specifically, the global movies and entertainment segment have demonstrated strong growth potential, with the market estimated at USD 112.93 billion in 2025 and projected to reach USD 231.37 billion by 2033, registering a compound annual growth rate (CAGR) of approximately 9.7% during 2026-2033. This growth trajectory is primarily driven by the continued expansion of digital entertainment platforms, increasing penetration of streaming services, and the emergence of diversified revenue streams such as advertising, subscriptions, and experience-led monetisation models.

Key Global Trends & Insights

Digital Transformation and Convergence

Globally, the industry has entered a phase of digital dominance, where streaming, connected TVs, and mobile consumption are reshaping traditional models. Content is no longer restricted to one platform but spans multi-device ecosystems, integrating cinema, OTT, gaming, and live experiences.

Shift Toward Engagement-led Consumption

Consumer behaviour globally is moving from passive viewing to interactive and personalised consumption, driven by AI-based recommendations, gamification, and immersive formats.

Hybrid Monetisation Models

Industry players are increasingly adopting hybrid revenue models combining subscriptions, advertising, and commerce integrations, as reliance on single revenue streams declines

Experiential Entertainment Growth

Demand for live and experiential entertainment (concerts, cinema experiences, events) is growing rapidly, indicating that physical experiences still remain relevant despite digital disruption.

Global Outlook

The global M&E industry is expected to continue expanding at a steady CAGR, with growth led by:

• Digital platforms and advertising

• Subscription-based models

• Cross-platform content monetization

• Expansion of large-scale entertainment experiences

Source: EYMedia & Entertainment Report, ORMAX Box Office Report 2025 and Grand View Research

Overview of Indian Film Exhibition Industry

The Indian film exhibition industry recorded a historic performance in 2025, with total gross box office collections reaching approximately ^13,395 crore, registering a 13% growth over the previous year and becoming the highest-ever collection year in India.

The year also witnessed a significant increase in content success, with 37 films crossing ^100 crore, compared to 22 films in 2024, reflecting improved content quality and audience engagement.

However, this growth was accompanied by evolving demand dynamics. Total footfalls declined by around 6% to 83.2 crore, indicating that revenue growth was increasingly supported by rising average ticket prices (ATP), which grew sharply by 20% to ^161.

Top Performing Films (^150+ Crore Club - FY26) FY26 witnessed multiple large-scale blockbusters across languages. Key high-performing films included:

Indian Box Office Performance in 2025

The year 2025 emerged as a landmark period for the Indian film industry, delivering a strong mix of high- quality content and commercially successful films. It proved to be a highly rewarding year for cinema, reflecting both creative excellence and robust audience engagement.

Record-Breaking Box Office Performance:

The Indian box office achieved an all-time high, with total collections reaching ^13,395 crore, making 2025 the first year to surpass the ^13,000 crore milestone. This exceeded the previous record set in 2023 (^12,226 crore). Additionally, 37 films crossed the ^100 crore mark, compared to 22 films in 2024, highlighting a significant expansion in successful theatrical releases.

Strong Performance of Hindi Cinema:

Hindi cinema recorded its best-ever year, generating approximately ^5,504 crore in box office collections. Notably, 93% of these revenues came from original Hindi films, reflecting reduced reliance on dubbed South Indian content, which declined from 31% in 2024 to just 7% in 2025.

Blockbuster Successes Driving Growth:

Films such as Dhurandhar and its sequel Dhurandhar: The Revenge, emerged as the highest-grossing titles of FY 2026, with collections of approximately ^1,305 crore and ^1,641 crore, respectively, setting new benchmarks for Hindi cinema.

Resurgence of International Films:

International cinema witnessed a strong revival, recording 49% growth in 2025. This marked the highest post-pandemic performance and the second-best year ever after 2019, indicating renewed audience interest in global content.

Shifting Language Dynamics:

The combined share of South Indian languages declined from 48% in 2024 to 44% in 2025, although Kannada cinema showed notable growth within this segment.

Footfall Trends and Pricing Impact:

Total footfalls stood at 83.2 crore, reflecting a 6% decline from the previous year. This indicates a continued shift where revenue growth is increasingly driven by higher ticket prices rather than volume growth.

Rise in Average Ticket Prices (ATP):

The Average Ticket Price (ATP) witnessed its sharpest rise in the past four years, increasing by 20% from ^134 to ^161. This growth was supported by a higher contribution of Hindi and international films (52% share vs. 47% in 2024), as well as elevated pricing strategies for big-ticket films in South markets.

High-Grossing Film Clusters:

Only a select group of films crossed the ^500 crore mark, including Dhurandhar: The Revenge, Dhurandhar, Kantara: A Legend Chapter-1, and Chhaava. Additionally, Saiyaara, Coolie, and Mahavatar Narsimha each surpassed the ^300 crore milestone, indicating a strong concentration of box office revenues among blockbuster releases.

Growth in Regional Cinema:

Regional cinema continued to gain momentum, with Gujarati cinema experiencing exceptional growth of 189%, increasing from ^84 crore in 2024 to ^242 crore in 2025. This growth was largely driven by the success of Laalo: Krishna Sada Sahaayate, which became the highest-grossing Gujarati film of all time.

Key Trends in Film Exhibition Industry

1. Evolution of Content Consumption Patterns

Content consumption patterns have evolved from star-driven cinema to story- and concept-driven content, with growing diversity in genres including mythology, action franchises, anime, and multi-lingual narratives. Films are increasingly treated as multi-platform intellectual properties, extending their lifecycle beyond theatres.

2. Accelerated Growth of Regional Cinema Ecosystem

Regional cinema has emerged as a dominant force, contributing over 65% of films produced in India, with strong box office performance across languages such as Telugu, Tamil, Malayalam, and Gujarati. Notably, Gujarati cinema recorded 189% growth in 2025, highlighting the rising importance of regional markets in driving exhibition revenues.

3. Reaffirmation of Theatrical as a Premium Consumption Channel

Theatrical releases regained importance in 2025, with record revenues and strong performance of big- budget films. The success of blockbuster titles indicates that cinemas continue to be the preferred medium for premium, large-scale, experiential content, even amid OTT competition.

4. Expanding OTT Ecosystem and Content Distribution Trends

OTT platforms have expanded significantly, with over 143 million households subscribing to OTT services in 2025, supported by bundled offerings and premium content strategies.

However, the proportion of content exclusively produced for OTT remains limited, with films continuing to rely heavily on theatrical release windows for value creation

5. OTT Business Model Transition Towards Sustainable Profitability

OTT platforms are undergoing a strategic shift from aggressive expansion to profitability and sustainable monetisation, reducing content spending and focusing on premium, high-impact content aligned with theatrical performance.

6. Enhancing Guest Experience Through Customer-Centric Innovation

Exhibitors are enhancing customer experience through premium formats, improved seating, F&B offerings, digital ticketing, and personalized services, aligning with evolving consumer expectations for immersive entertainment experiences.

7. Diversification of Revenue Streams Beyond Core Box Office

Revenue streams are increasingly diversified beyond ticket sales to include:

• Food & beverages

• Advertising and brand partnerships

• Event screenings and alternative content

• Non-film content such as live events and sports

This diversification enhances profitability and reduces dependence on box office volatility.

Segment Growth Dynamics

Multiplex Expansion and Premiumisation Momentum in India

The multiplex segment in India is witnessing steady expansion driven by increasing urbanisation and rising consumer preference for premium viewing experiences. Growth is supported by:

• Expansion into Tier-II and Tier-III cities

• Higher screen density in urban clusters

• Adoption of premium formats (IMAX, recliner seating)

• Increasing mall infrastructure

Multiplexes are playing a critical role in driving higher ticket prices and enhanced audience engagement, contributing significantly to overall industry growth.

Shifting Audience Preferences and Multi-Platform Consumption Behaviour

Indian audiences are increasingly multi-platform, price-sensitive, and experience-oriented. While mobile consumption dominates digital viewing, theatrical consumption remains relevant for event films and high- quality cinematic experiences. Audiences also demonstrate a rising preference for regional and localised content, indicating deep cultural resonance in content consumption.

Theatrical and Digital Platforms: A Converging Ecosystem

The competitive landscape between theatres and OTT platforms is evolving toward coexistence rather than substitution. While OTT offers convenience and accessibility, theatres retain a strong advantage in delivering large-scale, immersive, community-driven experiences, especially for blockbuster content. The industry is increasingly adopting a hybrid distribution model, where theatrical release remains the primary window for monetization, followed by OTT releases.

Outlook: Sustained Growth with Evolving Industry Dynamics

The outlook for the Indian film exhibition industry remains positive, supported by:

• Continued expansion of multiplex infrastructure

• Strong pipeline of large-scale films

• Increasing disposable incomes and urban consumption

• Growing demand for premium cinematic experiences

However, challenges remain in the form of OTT competition, content volatility, and dependence on blockbuster releases.

Overall, the industry is expected to witness steady long-term growth, driven by structural demand and evolving consumer preferences, positioning theatrical exhibition as a key pillar of Indias entertainment ecosystem.

Challenges in Film Exhibition Industry

The Indian film exhibition industry continues to demonstrate strong growth potential; however, it faces a range of structural and cyclical challenges that require strategic adaptation and operational resilience.

1. Volatility of Content and Dependence on Blockbusters

The performance of the exhibition sector remains highly dependent on the success of a limited number of big-budget films. A significant portion of annual box office collections is concentrated in a few "event” releases, resulting in revenue volatility during periods with fewer high-performing films. This uneven content pipeline impacts theatre occupancy levels and overall profitability.

2. Intensifying Competition from Digital Platforms (OTT)

The rapid proliferation of OTT platforms has transformed content consumption patterns, offering consumers flexibility, convenience, and access to a wide range of content at competitive price points. While theatrical releases remain relevant for large-scale films, the growing availability of high-quality digital content continues to create competitive pressure on cinema footfalls and frequency of visits.

3. Declining Footfalls and Price Sensitivity

Despite growth in overall box office revenues, industry footfalls have shown periodic declines, indicating a shift toward price-driven revenue growth rather than volume-led expansion. Rising ticket prices, premium formats, and ancillary costs such as food and beverages have increased the overall cost of a cinema visit, making audiences more selective and price sensitive.

4. Rising Operating and Capital Costs

The industry faces increasing cost pressures across multiple fronts, including:

• Rental and real estate expenses in prime locations

• Employee and utility costs

• Technology investments for premium formats and digital infrastructure Maintaining profitability while continuing to upgrade cinema experiences requires significant capital expenditure and operational efficiency.

5. Content Windowing and Release Strategy Uncertainties

The evolution of content release strategies, including shorter theatrical windows and simultaneous or early OTT releases, poses challenges to revenue maximisation for exhibitors. While theatrical releases remain the primary monetisation window, shifting content strategies can impact box office performance, especially for mid-budget films.

6. Fragmentation of Audience Attention

Consumers today have access to multiple entertainment options, including OTT platforms, gaming, social media, and short-form video content. This fragmentation of attention has reduced the frequency of cinema visits, especially among younger audiences, who increasingly consume entertainment across multiple digital platforms.

7. Infrastructure Constraints and Low Screen Density

India continues to have relatively low screen density compared to global benchmarks, particularly in non- metro markets. While this represents a long-term opportunity, it also highlights challenges in terms of infrastructure development, regulatory approvals, and capital deployment for expanding the exhibition footprint.

8. Regulatory and Compliance Environment

The exhibition sector operates within a dynamic regulatory landscape, including local taxation, licensing requirements, and content certification norms. Changes in policies or delays in approvals can impact operational efficiency and expansion plans.

9. Evolving Consumer Expectations

Audiences are increasingly seeking premium, immersive, and differentiated experiences, including enhanced seating, superior audio-visual technology, and integrated food and entertainment offerings. Meeting these expectations requires continuous innovation and investment, adding to cost pressures for exhibitors.

10. Dependence on Urban Consumption Trends

A significant portion of theatrical revenues is driven by urban and metropolitan markets. Economic fluctuations, changes in consumer spending patterns, or disruptions in these markets can directly impact overall industry performance.

Source: EY Media & Entertainment Report and ORMAX Box Office Report 2025

Company Overview

Connplex Cinemas Limited is an emerging and rapidly expanding player in the Indian film exhibition industry, focused on delivering differentiated cinema experiences through a scalable, asset-light business model. Established in 2015, the Company has positioned itself as an innovative entertainment platform that combines premium movie exhibition, strategic partnerships, and diversified revenue streams to create sustainable long-term value.

Over the years, Connplex has built a strong and growing footprint across India, reflecting its steady expansion in both urban and underpenetrated markets. The Company has strategically focused on Tier-II and Tier-III cities, targeting regions with rising disposable incomes and growing demand for quality entertainment infrastructure, thereby tapping into a relatively underserved yet high-potential audience base.

Connplex operates through a unique asset-light franchise-led model, which enables rapid scalability with optimised capital deployment. Through its Franchise-Owned Franchise-Operated (FOFO) and Franchise- Owned Company-Operated (FOCO) structures, the Company collaborates with local entrepreneurs and real estate partners to expand its network efficiently, while maintaining operational and brand consistency. This model reduces capital intensity while accelerating market penetration, enabling faster breakeven and improved returns on investment.

The Companys business is centred around delivering a premium and customer-centric cinema experience, supported by high-quality infrastructure, including recliner seating, advanced projection systems, and state-of-the-art sound technologies. Connplex focuses on creating an immersive and comfortable viewing environment, complemented by curated food and beverage offerings, personalised services, and innovative cinema formats designed to cater to evolving consumer expectations.

Connplex has developed a diversified revenue model beyond traditional box office collections. Revenue streams include ticket sales, food and beverages, advertising, franchise fees, convenience fees, and private events, allowing the Company to enhance profitability while reducing reliance on box office volatility. In FY 2026, ticketing and F&B continued to remain key contributors, supported by growth in advertising and ancillary services.

The Company has also introduced multiple cinema formats to cater to different customer segments and geographical markets, including:

• Luxuriance Model - premium, high-end theatres targeting affluent audiences

• Signature Model - versatile and refined formats for a broader audience base

• Express Model - compact and efficient formats suited for urban and high-density locations

This flexible format strategy enables Connplex to optimise seating capacity, enhance space utilisation, and tailor customer experiences based on local market demand.

Operationally, the Company has demonstrated strong growth momentum. The number of screens has grown at a 3-year CAGR of approximately 68% (FY23-FY26), supported by continuous expansion and franchise partnerships. Footfalls have also increased significantly, with increase in admissions in FY26, reflecting strong consumer acceptance and brand traction despite industry competition.

Geographically, Connplex has established a balanced presence across regions, with a strong concentration in Western and Eastern India, while steadily expanding into Northern and Southern markets. The Company continues to strengthen its pipeline, with 47 new screens added in FY26.

Portfolio Expansion during the year:

Connplex Cinemas opened 47 screens across 16 cinemas during FY26. The details are as follows.

Connplex continues to leverage strategic partnerships to strengthen its ecosystem, including collaborations for film programming, digital ticketing platforms, and F&B partnerships, thereby enhancing both operational efficiency and customer reach. Its association with online ticketing platforms enables seamless booking experiences, while content partnerships ensure a consistent and diverse movie slate.

At its core, Connplex Cinemas is driven by a vision to transform the cinema-going experience in India by combining affordability, accessibility, and premium quality. Its strategic focus on underserved markets, coupled with a cost-efficient and scalable business model, positions the Company as a strong growth- oriented player in the evolving Indian media and entertainment landscape.

Financial and Operational Performance: Financial Overview:

Particulars (Rs. Lakhs)	FY26	FY25	Chang YoY (%)
Revenue from Operations	14,752.06	9,560.96	54.29%
EBITDA	3,492.87	2,624.14	33.11%
EBITDA Margin	23.68%	27.45%
PBT	3,485.01	2,574.21	35.38%
PAT	2,607.92	1,897.46	37.44%
PAT Margin	17.68%	19.85%
EPS	15.15	13.55

a. ) Revenue from Operations:

In FY26, the Company recorded highest ever Revenue from operations of Rs. 14,752.06 Lakhs due to increase in revenue from Sales Ticket, Food & Beverages and Advertising Revenue

b. ) EBITDA & EBITDA Margin:

In FY26, the EBITDA increased by 33.11 % to Rs. 3,492.87 lakhs in comparison to Rs. 2,624.14 Lakhs on FY25. The EBITDA Margin for FY26 is 23.68 % as compared to 27.45% in the FY25.

c. ) PBT:

In FY26, the PBT increased by 35.38% to Rs. 3,485.01 Lakhs in comparison to Rs. 2,574.21 Lakhs in FY25.

d. ) PAT & PAT Margin:

In FY26, the PAT increased by 37.44 % to Rs. 2,607.92 lakhs in comparison to Rs. 1,897.46 lakhs in FY25. The PAT Margin for FY26 is 17.68% as compared to 19.85% in the FY25.

e. ) EPS:

IN FY26, the Company recorded earnings per share of Rs. 15.15 per share as compared to Rs. 13.55 per share in FY25.

Operational Overview:

• Footfalls during FY26 is 27,62,857, YoY growth of 63%.

• ATP during FY26 is Rs. 264, YoY growth of 6%.

• SPH during FY26 is Rs. 95, YoY growth of 14%.

• In FY26, company opened 47 new screens out of which, 21 in Express Model, 10 in Signature Model and 16 in Luxuriance Model.

• Strong asset-light franchise model (FOFO & FOCO) enabling scalable growth

• Continued focus on Tier II and Tier III markets, driving penetration and profitability

Key financial ratios, along with detailed explanations therefor:

Particulars	FY26	FY25	Change (%)	Reason for Change
Debtors Turnover	8.57	11.30	(24.16%)	Altered due to change in level of operations
Inventory Turnover	9.79	16.25	(39.76%)	Altered due to change in level of operations
Interest Coverage Ratio	278.04	448.69	(38.03%)	Altered due to change in level of operations
Current Ratio	5.64	2.57	119.54%	Improved due to Scale of Operations
Debt-Equity Ratio	0.01	0.03	(59.00%)	Improved due to Scale of Operations
Operating Profit Margin (%)	23.71%	26.98%	(12.14%)	Altered due to change in level of operations
Net Profit Margin (%)	17.68%	19.85%	(10.92%)	Altered due to change in level of operations
Return on Net Worth (%)	32.81%	125.15%	(73.78%)	Altered due to change in level of operations

Notes:

a) . Above ratios were based on the Standalone Financial Statements of the Company

b) . Definitions of the ratios:

1. Debtors turnover: Average trade receivable by total revenue from operations for the year.

2. Inventory turnover: Average inventory by Sales for the year.

3. Interest coverage ratio: Total EBIT by finance cost for the year.

4. Current ratio: All types of Financial and Non-Financial Current assets by all types of Financial and Non- Financial current liabilities.

5. Debt equity ratio: Current and Non-current Borrowing by total equity at the end of the year.

6. Operating profit margin: Operating EBIDTA by Total Income for the year.

7. Net profit margin: Profit for the year by Total income for the year.

8. Return on net worth: Profit for the year by average Total Equity.

Strengths, Weakness, Opportunities and Threat: Strengths:

Connplex operates a FOFO (Franchise-Owned Franchise-Operated) and FOCO (Franchise-Owned Company-Operated) model, enabling rapid expansion with relatively low capital expenditure and improved return potential.

The Company has demonstrated robust revenue growth with improving profitability margins, reflecting scalability of its business model.

Revenue is diversified across multiple channels including Ticketing and exhibition, Food & beverages, Cinema setup and franchise income, Advertising and ancillary services. This reduces dependence on a single income stream and enhances resilience.

Strategic presence in emerging markets allows Connplex to tap high-growth, underpenetrated regions with increasing disposable incomes and limited competition.

Focus on high-quality infrastructure, advanced projection systems, and premium seating enhances customer experience and supports higher ticket pricing.

Promoters with direct involvement and significant shareholding bring strategic alignment, operational focus, and long-term commitment.

Weaknesses:

Heavy reliance on franchise partners may lead to Operational inconsistencies, Service quality variation and Brand dilution risk.

The business is dependent on Box office Collection, Availability of blockbuster films and Audience turnout fluctuations.

Top suppliers contribute a significant portion of procurement, creating dependency and potential supply-chain risks.

Cinema operations, particularly expansion and F&B, require substantial working capital, impacting liquidity management.

Opportunities:

The Indian M&E sector is expected to grow significantly, supported by increasing digital penetration, rising incomes, and content consumption.

Low screen density in smaller cities offers significant expansion headroom for Connplexs scalable model. Growing consumer preference for premium cinema experiences aligns well with Connplexs positioning, supporting higher margins.

Opportunities to expand On-screen and digital advertising, Private events and corporate screenings and Non-film content.

Investments in digital ticketing, analytics, and premium formats can enhance customer engagement and operational efficiency.

Threats: .

OTT platforms continue to pose a structural threat by offering affordable, convenient, and high- quality alternatives to cinema viewing.

Cinema attendance is influenced by Release schedules, Economic conditions and Seasonal patterns. This leads to revenue volatility.

Delays, weak content, or fewer blockbuster releases can significantly impact occupancy and revenues.

The business is subject to multiple regulatory approvals, tax regimes, and compliance requirements, exposing it to potential penalties and operational disruptions.

Continuous investments are required to keep pace with advancements in cinema technology, impacting margins and capital requirements.

Established players with larger scale may have advantages in Film acquisition, Pricing power and Marketing reach.

Negative publicity or inconsistent franchise performance may adversely affect brand perception and customer trust.

Investor Relations and Engagement:

Investor Relations (IR) plays a crucial role in todays dynamic world to manage investor expectations. The objectives of Companys investor relations activities are to boost confidence, develop a long-term relationship and build trust with stakeholders, including shareholders, investors and analysts, through true and fair disclosure of information, explanation and bilateral communication.

To pursue these objectives at all times, the Company regularly discloses necessary information and engages through targeting investor outreach initiatives. Engaging closely with the investor community helps the Company to gain investor confidence, thereby enabling it to drive maximum value out of the IR programme.

Since listing, Connplex Cinemas built their investor engagement and outreach through the following initiatives:

The Company conducted post-results earnings conference calls following the announcement of financial results for H1FY26 and H2FY26, providing detailed insights into financial and operational performance.

Participated in two domestic investor conferences hosted by leading brokerage firms, facilitating broader institutional engagement.

Participated in Non-Deal Roadshow [NDR] in Mumbai, engaging directly with investors and analysts to communicate its growth strategy and business outlook.

Investor Presentations, Press releases, and all statutory disclosures were regularly submitted to the stock exchanges and made available on the Companys website, ensuring easy and transparent access to information for all stakeholders.

Internal Control System:

Connplex Cinemas Limited has robust internal control system and procedures compatible with size and operations. The Company has well defined internal control system and policies. The Internal Audit of the Company is done by internal auditor firm that includes professionally qualified team.

Some elements of the Companys internal control system:

Preparation and supervision of annual budgets for all operating and service functions.

Making Standard Operating Procedures and guidelines and ensure compliance with same.

Scope of internal audit and the frequency of audit being decided every year to ensure sufficient coverage of different areas and functions over a reasonable period.

The audit plan is discussed and approved in Audit Committee.

Internal Audit is conducted regularly during the year and Internal Audit Report is being submitted to audit committee for their review and also for future improvements in the system across the organization.

The Company is also having well defined delegation of power with authority limits for approving revenue and capex expenditures including approval of non-routine and abnormal items.

Statutory Auditor also performs independent testing of Internal Finance Controls over financial reporting which is line with regulatory reporting requirements.

Internal Auditor is also checking the Internal Financial Controls as part of their Audit scope.

The Audit Committee of the Board of Directors comprising of majority independent Directors, which quarterly reviews the audit plans, significant audit findings, adequacy of internal controls system, compliance with Accounting Standards etc.

Based on the internal audits, compliance reviews, and oversight by the Audit Committee, the Board is of the opinion that the internal control systems of the Company were adequate and operating effectively as on 31st March, 2026.

Cautionary Statement

This document contains statements about expected future events, financial, and operating results of Connplex Cinemas Limited, which may be forward-looking. By their nature, forward-looking statements require your Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the actual results may differ from the forward-looking statements mentioned in the Annual Report. Readers are cautioned not to place undue reliance on forward-looking statements.