Diksat Transworld Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

INDIAN MARKET:

India is poised to lead the global economy once again, with the International Monetary Fund (IMF) projecting it to remain the fastest growing major economy over the next two years. According to the April 2025 edition of the IMFs World Economic Outlook, Indias economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers.

GLOBAL MARKET

According to the recent report on Indian Media & Entertainment Industry published by EY the Indian Media and Entertainment (M&E) sector grew 3.3% in 2024 from INR 2.30 triillion to INR 2.50 trillion (US$ 29.40 billion). Digital Media emerged as the largest segment, accounting for 32% revenue share. However, subscription revenues fell due to a decrease in Pay TV homes and poor theatrical performances by films. Overall, the sector is projected to grow by 7.2% in 2025, reaching INR 2.68 trillion (US$ 31.6 billion)..

MACRO-ECONOMIC OVERVIEW

The landscape of the Indian Media and Entertainment (M&E) has undergone a significant transformation, with digital media finally breaking televisions 20-year stronghold to become the largest segment in the industry. This historic milestone marks the dawn of a new era, one where digital platforms redefine not only the creation, distribution, and monetization of content but also the very core of what the M&E sector represents. Keeping in line with the overall growth of digital media, your Companys Digital Music Channels continue to generate steady stream of revenue to the Company. Going forward, your Companys main growth driver will be in the digital media sector, which will be contributing major share of its revenue and profitability

OPPORTUNITIES, THREATS AND CHALLENGES

The biggest advantage of digital media is that the digital content goes to the global audience. There are no geographical limitations, thereby giving an opportunity to content creators to garner revenue from various countries. The ability to monetise digital content is not a limited practice and comes in many forms. Today, through subscription models, pay-perview and advertising through digital media, companies can make their profits.

One of the major challenges that has always plagued the media industry is Piracy. On account of piracy, revenues are lost through violation of limited rights given to the users. Another significant problems is the issue of audience attention. The Audience is getting used to Short Videos and Reels.

Thirdly making money through monetization of digital content is also not easy. Ads alone are not enough. Subscription model is also not very effective. New forms of generating revenue have to be developed. To meet these challenges and threats, it will be necessary for media companies to use advanced analytics, AI- driven recommendations to engage viewers and maintain a regular stream of revenue.

BUSINESS PERFORMANCE:

1) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control system to ensure operational efficiency and compliance of laws and regulations. The internal control system is reviewed by the Audit Committee from time to time and its suggestions, if any, are implemented. The Company has appointed a firm of Chartered Accountants as Internal Auditor, which submits its report on a quarterly basis. Observations of Internal Auditor are noted and wherever necessary corrective steps are taken.

2) RISKS AND CONCERN:

The film production, distribution, and exhibition industry is subject to various risks and concerns, including intense competition, changing consumer preferences, regulatory compliance, piracy, and technological disruptions. Our company is exposed to risks related to content creation, market demand, and revenue volatility. To address these concerns, we focus on creating high-quality content, diversifying our distribution channels, and investing in digital technologies to stay competitive and adapt to evolving market trends.

3) RISK MANGEMENT:

The film production, distribution, and exhibition industry faces various risks, including content, market, regulatory, and technological risks. To mitigate these risks, our company employs strategies such as diversification, market research, regulatory compliance, and innovation, aiming to minimize their impact and ensure sustainable growth and profitability.

4) HUMAN RESOURCES:

The Company maintains healthy, cordial and harmonious relations with all personnel and thereby enhancing the contributory value of the Human Resources.

5) GOVERNMENT INITIATIVES:

The film production, distribution, and exhibition industry has benefited from various government initiatives, including incentives for film production, digital initiatives, and support for MSMEs. Our company has leveraged these initiatives to enhance operational efficiency, drive innovation, and expand its market presence. We continue to explore opportunities to utilize these initiatives to drive growth and profitability.

6) OUTLOOK:

With the governments continued support through initiatives such as film production incentives and digital initiatives, we are optimistic about the growth prospects of the film industry. Our company is well-positioned to capitalize on emerging trends and opportunities, and we expect to drive growth through strategic content creation, expanded distribution channels, and enhanced exhibition experiences. We are confident that our focus on innovation, quality, and customer engagement will enable us to maintain our market position and achieve sustainable growth in the coming years

7) SAFE HARBOUR:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, estimates and expectations are forward looking statements. These statements are based on certain assumptions and expectations of future events. The actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting the Entertainment Industry, changes in government regulations, tax regimes, economic developments within India and outside the country and other factors such as litigations and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.