Eros International Media Ltd Management Discussions

Global Economy

The global economy in FY 2025-26, was resilient but grew at moderate pace amid trade tensions, geo-political uncertainty and shifting monetary policies following the challenges posed by US-Iran geo-political tensions, and supply chain disruptions showed slow progress. Global sentiments are in fragile state. If tariff conditions and trade policy improve, than global growth can strengthen to great extent. Economic conditions remained uneven across regions due to geopolitical risks.

Key Drivers of Economic Performance:

1. Global Growth Outlook: Global GDP growth is projected at a slower pace compared to previous years. Advanced economies, particularly the U.S. and the Eurozone was in uncertainty, while emerging markets, particularly China and India, contributed significantly to global expansion.

2. Inflation and Monetary Policy: Inflation is expected to decline to 4.2% in 2025 and 3.6% in 2026. Inflation paths differ across countries. Advanced economies are generally approaching their inflation targets. However, inflationary pressures began to moderate towards the end of FY2025-26, leading to more cautious monetary policy outlooks in 2026.

3. Geopolitical Tensions: The war in Iran and Gulf countries continued to exert a heavy toll on energy prices and global trade, particularly impacting Europe. Ongoing trade tensions between the U.S., India and China also created uncertainties in global supply chains and international investment flows.

4. Energy and Commodity Markets: The energy market became expensive with oil and gas prices higher during 2025-26. Commodities like food grains and metals faced fluctuating geopolitical factors.

5. Technology and Innovation: The ongoing digital transformation, particularly in AI and renewable energy, showed promise for long-term growth. Countries and companies investing in green technologies and digital infrastructures are expected to lead the future economic trajectory.

Regional Highlights:

United States: The U.S. economy growth remained below historical averages. Consumer spending was supportive, but inflationary pressures led to tighter financial conditions.

Europe: Gradual recovery was supported by lower inflation and easing interest rate. Manufacturing and

Exports sectors face pressure from global trade uncertainty.

China: Chinas growth remained slowing in 2025 compared to previous period. It also faced weak property markets and challenges in domestic markets.

India: India remains as one of the fastest-growing major economies, driven by domestic demand, a growing technology sector, and infrastructure investments.

Outlook for FY 2026-27

The global economy is expected to show resilient conditions in FY 2026-27, with growth continuing at a slower pace.

Inflationary pressures are expected to ease, but economic challenges such as high tariff levels, energy uncertainty, and geopolitical risks will persist. Key areas to watch include global trade policies, technological advancements, and the transition to a green economy.

In conclusion, while the global economy in FY 2025-26, showed signs of recovery, it remains vulnerable to several risks. As countries face geo-political conflicts, inflation persistence and tariff war, trade cooperation will be essential to sustaining long-term growth.

Indian Economy

The Indian economy in FY 2025-26 has shown resilience and growth despite ongoing global challenges, positioning itself as one of the fastest-growing major economies. The nations economic performance was supported by resilient domestic demand, policy reforms, and sectoral expansion in key sectors such as technology, services, manufacturing, and infrastructure. However, inflationary pressures, external uncertainties and energy markets posed significant challenges.

1. Economic Growth

Indias economy is projected to grow at around 7.4% to 7.6% in FY 20256, maintaining its position as one of the fastest-growing large economies globally. Growth was mainly driven by:

Strong domestic consumption, Investments & service sector performance

Government expenditure on infrastructure and key development projects. prices due to disruptions and

Growth in services, particularly digital services, and e-commerce.

Reduction in GST levels to stimulate expenditure of consumers

The recovery in sectors like manufacturing, services, agriculture and emerging secortors also contributed to growth, while exports remained under pressure due to global economic slowdown and hike in trade tariff.

2. Inflation and Monetary Policy

Inflation continued to be a challenge, primarily driven by food and energy prices. However, the overall inflation rate showed signs of moderation towards the end of FY 2025-26, thanks to a better agricultural output, controlled commodity prices, and government interventions.

The Reserve Bank of India (RBI) remained aligned in resolving and strengthening domestic demands

Despite inflation, the fiscal policy focussed on boosting consumer spending through tax reliefs. Monetary policy provided liquidity and cost of capital support needed to the recovery.

3. Sectoral Performance

Services Sector: The services sector remained a major contributor of Indias economic growth.

IT, software services, digital platforms, and the entertainment industry (including films and OTT) showed strong recovery.

Manufacturing and Infrastructure: Manufacturing witnessed strong growth due to domestic demand. Additionally, large-scale infrastructure projects, including roads, Metros, railways, and urban development, continued to drive the economy.

Agriculture: Agriculture showed average growth, aided by good monsoons and favourable weather conditions. The government introduced reforms to enhance agricultural productivity..

Exports and Trade: Indias exports and global trade have been robust. The export of goods such as electronics, pharmaceuticals and services like IT continued to be strong.

4. Challenges

Global Economic Uncertainities The US Tarrif and Global economic directions raised concerns. The global slowdown, especially in advanced economies, impacted Indias export growth and foreign investments.

Inflationary Pressures: Though inflation moderated towards the latter part of FY 2025-26, rising food and fuel costs remained a concern, particularly affecting lower-income households.

Unemployment and Job Creation: Despite growth, unemployment, especially among the youth and in rural areas, remained a challenge. The government continued its focus on skill development, entrepreneurship, and job creation to address this issue.

Monetary Tightening: The central banks tightening of interest rates to control inflation increased borrowing costs and strict NPA norms, impacting sectors like finance, real estate, consumer durables, and automotive.

5. Key Government Initiatives

Infrastructure Development: The governments focus on infrastructure projects continued, with an emphasis on smart cities, railway modernization, and road expansion.

PLI Schemes: The governments Production-Linked Incentive (PLI) schemes for sectors such as electronics, pharmaceuticals, and renewable energy continued to boost manufacturing and attract foreign investment.

Digital and Green Economy: Investments in digital infrastructure, AI, and renewable energy gained momentum, with India positioning itself as a hub for technology and green energy solutions.

Waves 2025 – It has created the grounds for

Indias power as emerging as a global player and hub for Innovative Contents for Domestic and Global market in Media & Entertainment sector.

6. Outlook for FY 2026-27

Looking ahead, Indias growth is expected to remain stable in FY 2026-27, but at a slower pace due to global risks, tariff war, inflation concerns, and tighter financial conditions. Key growth drivers include:

Continued domestic demand fuelled by the growing middle class and urbanization.

Government infrastructure spending and initiatives like PLI schemes.

Digital and green economy initiatives that will shape long-term economic growth.

However, risks from geopolitical uncertainties, global inflation, and climate-related events could pose challenges. The focus will likely be on maintaining a balance between controlling inflation and fostering growth, along with structural reforms in labour, agriculture, and the financial sector.

Conclusion

Indias economy in FY 2025-26 displayed solid resilience, supported by a combination of strong domestic consumption, government reforms, and strategic investments. The outlook for FY 2026-27 remains positive, with continued emphasis on infrastructure development, digital transformation, and sustainability. However, managing external uncertainties and internal challenges such as unemployment and inflation will be crucial for sustaining long-term growth.

Media & Entertainment Industry

The Media and Entertainment (M&E) industry in India is projected to grow significantly with the sector reaching

INR2.78trillion in 2025 and expected to grow to INR3.3truillion by 2026 . However, it also faced challenges such as inflationary pressures, regulatory changes, and shifts in consumer preferences.

Key Trends in 2025-26

1. Digital Transformation and OTT Growth:

The OTT (Over-the-top) streaming market continued its significant increasing subscription expand, affordable data costs, and a shift in consumer behaviour towards on-demand content. Popular platforms like

Netflix, Amazon Prime Video, Disney+ Hotstar, and regional players saw increased subscription numbers. o There was a marked shift towards regional content, with regional language films and shows experiencing greater viewership across digital platforms. This trend is expected to continue, as OTT players tailor content to cater to diverse Indian audiences.

2. Films Entertainment

Box office revenues showed significant in FY 2025-26, with high-performing films both in

Hindi and regional languages contributing to a resurgence in theatrical releases. o The cinema sector continued to face the challenge of competition from digital platforms and evolving audience preferences. However, the experience of watching films in theatres remained an important draw for audiences, particularly with the resurgence of new technics and IMAX formats. Even Rerelease of films have helped to increase revenue in this sector.

3. Content Creation and monetisation: o The demand for high-quality content continued to rise, leading to an increased focus on premium content and collaborations with international studios. This was seen in the success of big-budget films, web series, and the increasing number of co-productions. o Indian producers continued to experiment with new genres, blending traditional narratives with modern storytelling formats with help of AI in content diversity.

Content localization was a significant companies investing heavily in dubbing, subtitles, and creating region-specific content to local markets, especially in non-Hindi-speaking regions.

4. Live Events and Sports: o The return of live events and sports broadcasting marked a turning point in 2025-26, attracting huge viewership and advertising revenue.

E-sports also gained traction, with several high-profile tournaments and a growing audience base, further strengthening the intersection between technology, gaming, and entertainment.

5. Advertising and Revenue Growth:

Advertising spend continued to rise, with digital platforms (including OTTs, social media, and video sharing apps) capturing a larger share of the overall ad pie. Traditional TV and print media, while still important, saw moderate growth compared to digital channels. o The ad-based model for digital platforms continued to grow, as advertisers sought to capitalize on the huge and engaged user base of streaming platforms, while social media influencers and user-generated content on platforms like Instagram, YouTube, etc. drove new advertising formats.

6. Challenges:

Inflationary pressures impacted production costs, talent fees, and marketing expenses. The increasing cost of raw materials, logistics, and the cost of talent posed challenges for content creators and distributors.

Regulatory challenges: The Indian M&E industry faced evolving regulatory scrutiny, especially concerning OTT content regulation, advertisement transparency, and data privacy laws. The government has shown interest in regulating OTT platforms, leading to potential changes in content and advertising standards.

Outlook for FY 2026-27

Looking ahead, the Indian Media and Entertainment industry is expected to continue its growth trajectory in FY 2026-27, driven by several key factors:

1. Continued OTT Expansion: o The OTT sector is poised to expand further, with more players entering the market and established players focusing on regional content, creating tailored experiences for specific audience segments.

2. Mix Models in Cinema:

The film industry is expected to embrace hybrid release models, combining theatrical releases with

OTT premieres. More films will follow the success of direct-to-digital releases, particularly for midrange budget films, while big-ticket films will still benefit from cinema-first strategies. trend, with o Premium theatrical experiences, such as 4D and IMAX screenings, will continue to offer differentiation from home-viewing experiences.

3. Growth of Regional and Niche Content:

The demand for regional content will continue to grow, with content providers increasingly focusing on languages and stories that resonate with local audiences. This will further diversify the types of content available on both digital platforms and in cinemas. o There will be a push for niche genres, such as period films, horror, thriller, and science fiction, gaining more traction with audiences both on TV and digital platforms.

4. Sports and Live Events:

The growing popularity of sports content, especially cricket, will drive significant

27. With global and regional sports events like the Olympics and Indian Premier League (IPL), the media rights market will continue to flourish.

5. Technological Innovations:

The rise of artificial intelligence (AI) and machine learning (ML) in content creation, curation, and distribution will play a key role in personalized recommendations, enhancing user experience, and improving the efficiency of content production.

Blockchain and NFTs could emerge as disruptive technologies in the M&E industry, especially in areas like content rights management and collectibles.

6. Content Monetization Strategies: o OTT platforms will continue to refine their subscription models and advertising strategies, exploring hybrid models such as SVOD-AVOD combinations. Greater personalization and data-driven content will lead to higher engagement and revenue. o Traditional media (television and print) will continue to adapt by investing in digital transformation, creating cross-platform experiences and synergies with OTT and social media platforms.

Conclusion

The Indian Media and Entertainment industry is poised for continued growth in FY 2026-27, driven by strong digital & AI adoption, the diversification of content, and the increasing importance of regional and niche content. While challenges such as inflation, regulatory changes, and the evolving competitive landscape remain, opportunities in digital platforms, cinema, and live sports will drive long-term growth. As the industry embraces technological advancements and hybrid business models, it will further cement its position as one of Indias most dynamic sectors.

Digital Media Segment

The Digital Media segment in India continued its growth trajectory in FY 2025-26, driven by increasing internet penetration, evolving consumer behaviour, and the continued rise of online content consumption across various platforms. Key factors such as OTT platforms, social media, digital advertising, and e-commerce contributed significantly to the sectors expansion.

1. OTT and Streaming Services

The OTT (Over-the-Top) video streaming market saw strong growth in FY 2025-26, driven by the increasing adoption of digital platforms across urban and rural regions.

Major players like Netflix, Amazon Prime Video,

Disney+ Hotstar, and regional platforms saw growth in both subscriptions and viewership. The demand for regional content surged, with platforms increasingly focusing on local languages and culturally relevant programming.

The introduction of AVOD (Advertising-based Video on Demand) models by some OTT platforms helped attract a broader audience, especially in Tier-2 and Tier-3 cities.

2. Social Media and Digital Content Creation

Social media platforms like Instagram, YouTube, Facebook, and Twitter (now X) experienced continued engagement growth, with content creators, influencers, and brands leveraging these platforms for targeted communication and monetization.

User-generated content (UGC) became increasingly central to the digital media ecosystem, with short-form video platforms like Instagram Reels, YouTube Shorts, and TikTok alternatives driving engagement, especially among Gen Z and millennial audiences.

Influencer marketing continued to grow as brands increasingly collaborated with micro, macro, and celebrity influencers consumer segments.

3. Digital Advertising

Digital advertising in India saw rapid growth, driven by the increasing consumption of digital media across mobile devices and personal computers. The rise in e-commerce, OTT, and social media spending contributed significantly to the overall increase in ad spends.

Video ads, native ads, and social media advertising became the most popular formats, with advertisers shifting a larger portion of their budgets from traditional TV and print to digital platforms.

Programmatic advertising and data-driven marketing gained prominence, allowing brands to personalize ads and deliver targeted campaigns to the right audience based on demographics, interests, and behaviour.

4. Challenges in the Digital Media Segment

Regulatory Uncertainty: The Indian government continued to scrutinize digital platforms, including OTT services and social media, regarding content moderation, data privacy, and consumer protection. Potential changes in content regulations could impact the way platforms operate.

Ad Spend Competition: Digital platforms faced competition for ad dollars from traditional media, and the growing advertising saturation on social platforms and OTT services led to rising costs for advertisers.

Content Fragmentation: The increasing number of platforms and content choices created challenges for both consumers (in terms of subscription overload) and content creators (who needed to diversify content for multiple platforms).

5. Outlook for FY 2026-27

The Digital Media segment is expected to continue its upward trajectory, with continued growth in OTT streaming, social media, digital advertising, and e-commerce.

Innovations in short-form content, immersive media (AR/VR), and the integration of AI-driven personalization are expected to shape the future of digital media.

Despite challenges in monetization, digital platforms will increasingly adopt hybrid models, combining subscriptions with ads to create a more balanced revenue structure.

Conclusion

The digital media segment in India experienced a highly positive performance in FY 2025-26, driven by the expanding consumption of digital content, increased ad spending, and the growing influence of social media platforms. As the industry moves into FY 2026-27, opportunities for growth remain strong, particularly in regional content, e-commerce integration, and new technologies like AI and immersive media. However, platforms will need to navigate regulatory challenges and competition for ad revenues to sustain growth in the coming years to reach more targeted

Company Overview

Eros International Media Limited (Eros International) is a leading global Company in the Indian filmed and digital

Entertainment Industry which co-produces, acquires and distributes Indian language films in multiple formats worldwide. The success is built on the relationships we have cultivated over the past 42 years with leading talent, production companies, exhibitors and other key participants in our industry. Leveraging these relationships, we have aggregated rights of numerous films in our library, including recent and classic titles that span different genres, budgets and languages. We have a portfolio of numerous films.

Film distribution across theatrical, overseas and television and other channels along with library monetization provide us with diversified

International produces and acquires content for Eros Now, OTT entertainment service. Launched in 2012, Eros Now has digital rights of various films, out of which many films are owned in perpetuity, across Hindi and regional languages from Eros internal library, as well as third-party aggregated content.

Your Companys key asset is a film library of huge number of films. In an effort to reach a wide range of audiences, we maintain rights to a diverse portfolio of films spanning various genres, generations and languages. These include rights to films in Hindi and several regional languages, Tamil,

Telugu, Kannada, Marathi, Gujarati, Bengali, Malayalam and Punjabi. We have strong operational focus in syndication and monetization of these film and Music Rights as part of our business development and operations.

Post COVID-19, your Company had challenges in completing projects for releasing its films on account of significant cashflow challenges leading to deferment of planned film slate. This impacted the revenue and profitability of the Company during financial year 2025-26, and your Company was forced to evaluate strategic assets sale of its rights to a third party. The consequent reduction of Bank debt and liquidity in the balances is expected to allow your Company to recommence production on its previously planned film slate.

The Company has also initiated formulating innovative ways of updating its existing content libraries. Given a rise in demand for content and increasing viewership on OTT platforms, coupled with the limited production of new content, existing library content is likely to become more valuable. Moreover, once normalcy resumes, owing to pent-up demand, the M&E sector may be one of the first sectors of the economy to see a revival, and Eros International is well-prepared with its large existing content library, to take advantage of any digital opportunities that exist, in the meantime.

Your Company is hopeful about sailing through the current situation successfully and coming out on the other end. In order to do this, it is working on innovative ways of earning revenue and strengthening its value proposition, thus reinventing itself, and further fortifying its position.

Financial Overview (Consolidated)

	FY 2025-26	FY 2024-25	YoY Change (in %)
Revenue from Operation (Rs. in lakh)	2940	6,322	(53)
EBITDA (Rs. in lakh)	(12607)	12,988	(197)
Profit / (Loss) after Tax (Rs. in lakh)	(13374)	11,502	(216)
EPS	(14.32)	11.99	(219)

Key Ratios*

	FY 2025- 26	FY 2024- 25	Change (%)	Reasons
Trade Receivables Turnover Ratio	0.07	0.15	(55.38)	Due to decrease in revenue from operations during the year
Inventory	Nil	Nil	NA	NA
Turnover Interest Coverage Ratio	Nil	Nil	Nil	In addition, Eros Due to loss in current year
Current Ratio	0.62	0.69	(10.62)	N.A.
Debt Equity Ratio	0.31	(0.39)	(19.33)	N.A.
Net Profit/ (Loss) Ratio	(3.58)	(0.17)	(2006)	Due to increase in loss in current year
Return on capital employed (in %)	-	-	-	Due to current year losses, the networth of the company has eroded. Hence ratio is not applicable

*Computed on Standalone basis.

Opportunities and Threats: Opportunities:

Film Making and Distribution:

Technological Innovations and localization of content makings will reduce the cost of production .

AI Digitization & Partnerships:

Innovative digitization and strategic international partnerships can take this sector to higher level.

Regional Contents are growing. Such contents can increase the viewership.

Threats:

Regulatory issues:

Local and Central governments intervention in freedom of content creators

Global Players aggression in variety of contents in local languages.

Geo-political and Tariff issues may hinder the growth of M&E sector.

Innovations in Contents may affect the fresh contents.

Strategic Overview

Our strategy is driven by the scale and variety of our content and the global exploitation of that content through diversified channels. Specifically, strategies: Scaling up productions, co-productions and acquisitions to augment our film library and original digital content

Expand our regional content offerings

Effectively monetize our strong film library across various platforms Create compelling content for Eros Now, OTT entertainment service Capitalize on the highly attractive market opportunity driven by secular tailwinds

Risk Management

The Risk Management framework includes Risk Management

Policy and identification of risks at Company Level, Strategic

Level and Operational level. The risk mitigation procedures associated with the business and prioritization of risks include scanning the business environment and having periodic risk review.

The risks associated with the Companys businesses are broadly classified in following categories:

Environmental Risk: Due to the adverse impact of POST

COVID-19, the Company may suffer losses but it can restrict the losses as COVID-19 has been controlled.

Economic Risk: Due to adverse geopolitical situations and tariff war or downturn which may negatively impact the Companys organizational objectives.

Regulatory Risk: Due to government regulations or any other statutory violations and amendments, which may lead to litigations and loss of reputation.

Operational Risk: Ability to attract and retain clients and manage a dynamic content distribution eco-system in view of rapid changes in audience preferences.

Internal Control Systems and their Adequacy

The Company has adequate internal controls required in the nature of its business and operations. The company can safeguard its assets and financial transactions with adequate checks and balances, while adhering to accounting policies. Systems are reviewed and improved regularly. With the Companys budgetary control system, it monitors revenue and expenditure with actual vs. approved budget. The Company has engaged an independent firm of Chartered

Accountants as its Internal Auditor which monitors and assesses the adequacy and effectiveness of the Internal Controls and Systems. Deviations from standard operating procedures are periodically reviewed and compliances are ensured.

The summary of the internal audit observations and status of implementation are submitted to the Audit Committee every quarter for its review and concerns, if any, are reported to the Board. The statutory auditors review the efficacy and adequacy of the internal audit function as a part of their audit procedures and has full access to all the reports and findings of the internal audit.

Human Resource

The Company believes that it has an excellent talent pool. This talent pool is the key to our sustained performance and improvement initiatives. The Company has a diverse employee base with technical knowledge and functional expertise. This helps to deliver the stipulated target. Performance is valued as an essential tool to accomplish vision, mission and objectives. The Companys ‘Human Capital headcount stands at 58 as on 31 March, 2026.

Outlook

The Media and Entertainment industry will continue to adjust business models to cater to a paradigm change in consumer preferences through deep customer understanding and strong engagement. The sector will witness integration of all four formats viz video, experiential, textual and audio to offer differentiated products in an omnichannel driven business model. The industry is also likely to witness consolidation and mergers, especially with the mid and low companies, to maintain a going concern and achieve scale. Operating priorities will be guided by leveraging the end customer data to reveal powerful insights, bringing efficiency in customer acquisition costs through precision monitoring and reducing the turnaround time for new product development. The M&E industry will have to leverage the opportunities in regional markets, growth in digital infrastructure and monetization strategies by investing in content, marketing and technology. The pandemic has made the Company re-strategize operational and legal aspects of the business, such as project timelines, production costs and schedules. The Company has a large content library, of its own as well as on its group OTT platform Eros Now, and with the rise in new content consumption patterns, its existing content is becoming more valuable.

We expect the resumption of normalcy to be marked by the recovery of the sector and provide all the players in the M&E space, across mediums and segments, a much-needed boost and the Company is well prepared with its existing huge content library to exploit any and all digital opportunities that come its way in the meantime.

Cautionary Statements

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities, laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments in India or globally, demand and supply conditions in the industry, changes in Government regulations, tax laws, litigations, employee relations and others.