Encash Entertainment Ltd Management Discussions

Indian Entertainment Industry

The Indian Media and Entertainment (M&E) sector continued to grow in 2024. It grew by INR81 billion to reach INR2.5 trillion (US$29.4 billion).

The M&E sector contributes 0.73% to Indias GDP. While the sector was 30% above its pre-pandemic 2019 levels. According to the EY M&E report 2025, the sector will grow at a CAGR of 7% to reach INR3.07 trillion (US$36.1 billion) by 2027.

Poor performance of large budget Hindi films, as well as some South films, led to a drop in overall box office collections. The Filmed Entertainment segment saw a revenue decline of 5% and registered total revenues of INR187 billion in CY2024 compared to 197 bn in the preceding year.

1823 films were released in 2024, but domestic theatrical revenues fell 5% due to lower footfalls. Only 11 Hindi films crossed box office collections of INR1 billion, down from 17 films in 2023. Both digital and satellite rights values fell 10% in 2024 as broadcast and OTT buyers focused on profitability.

Screen count increased 2% to reach 9,927 screens led by Maharashtra which added 50 new screens (5% increase), Kerala which added 36 new screens (5% increase), Rajasthan (8% increase) and Gujarat (2% increase) where both the states added 20 new screens. This is very positive trend for the Film Industry.

• Untapped OTT led monetization avenues.

•Strategic Investments and private equity funding are driving growth in M&E sector.

• Growing demand for regional content, creating opportunities for content creators and production house to cater to diverse linguistic and cultural preferences.

• Technological innovations like animations, multiplexes, etc and new distribution channels like mobiles and Internet have opened up the doors of new opportunities in the sector.

• Government is promoting Make in India initiative within M&E sector, encouraging domestic production.

• Budget Overruns due to unforeseen factors

• Changing viewer preferences

• Compliance with evolving Regulations such as content censorship and data privacy laws poses challenges.

• The rapid shift towards digital platforms and streaming services.

• Technical Issues

• Filming on locations can be unpredictable, and weather and environment conditions can pose a significant risk to film production. Rain, wind, extreme temperature cause delay in filming.

• Intense competition at time of film releases

• Piracy, violation of intellectual property rights poses a major threat to the Media and Entertainment companies

Effective risk management is essential for any business, regardless of industry or size. At Encash Entertainment Limited, the Company identifies and analyses potential risks to then implement controls that would help in mitigating those risks. Moreover, by regularly monitoring and reviewing the effectiveness of those controls, it strives to minimize the likelihood and impact of negative events that could otherwise harm its reputation, operations and financial performance. A well-designed and executed risk management program provides a competitive advantage by enhancing the Companys ability to navigate a rapidly changing business environment.

Information in the Management Discussion and Analysis that describe the Companys aims, plans, or projections may be considered forward-looking under applicable securities laws and regulations. Actual outcomes may differ significantly from those stated in the statement. Strong competition, leading to price cuts, high volatility in prices of major inputs such as steel, cement, building materials and petroleum products, changes in Government regulations, tax laws, economic developments within the country and other factors such as litigation and labour relations are all important factors that could affect the Companys operations.