G V Films Ltd Management Discussions

INDUSTRY STRUCTURE AND MARKET DEVELOPMENTS

The Indian M&E industry is on an impressive growth path. The industry is expected to grow at a much faster rate than the global average rate. This can be majorly credited to rising incomes, increasing internet penetration and a growing push toward digital adoption.

In the long run, growth is the M&E industry is expected in retail advertisement on the back of several players entering the food and beverages segment, E-commerce gaining more popularity in the country, and domestic companies testing out the waters. India’s rural regions are expected to be the next regions for growth. India has also gotten on board with 5G and is already planning for 6G well ahead of the future. This push towards digital adoption especially in the rural regions will provide advertisers and publishers with an immense opportunity to capture untapped markets and help grow India’s media and entertainment industry forward.

Proactive government policies can encourage international entertainment companies to invest in India and drive its growth furthermore.

GOVERNMENT INITIATIVES

The Indian government has launched several initiatives to support the media and entertainment industry in 2025, including:

- $1 billion fund for the creator economy: This fund aims to support digital content creators by providing access to capital, skill development, and global market integration.

- WAVEX 2025: An initiative to support and showcase emerging startups in the media-tech space, providing funding, visibility, and industry connections.

- Statistical Handbook on Media & Entertainment 2024-25: This handbook serves as an essential resource for data-driven policy and decision-making, capturing sectorial trends, audience behavior, revenue growth patterns, and regional and national trajectories.

These initiatives reflect the governments commitment to advancing the media and entertainment sector in India, with a focus on innovation, investment, and growth.

STRENGTHS

Due to India’s vast customer reach, almost all booming sectors and a growing middle class and higher disposable income, strengthening the industry along with technological innovations. And more importantly low cost of production resulting in high revenues.

WEAKNESSES

The media and entertainment industry is fragmented.

Lack of integrated production and distribution infrastructure

Lack of efforts in media penetration among the lower socio-economic classes.

OPPORTUNITIES & THREATS

There is an increasing interest of global investors in the entertainment sector, and in its initial stage, the new distribution channels offers an opportunity for development. with rapid de-regulation unfolding in the industry resulting in an exponential rise in viewership and increased advertising expenditure.

Piracy violation of intellectual property rights poses a major threat to the industry.

Lack of quality content.

Uncertainty about success in the marketplace.

SEGMENT-WISE OR PRODUCT WISE PERFORMANCE

The company has a single operating segment, namely Production, processing and editing of films

OUTLOOK

The Indian Media and Entertainment (M&E) sector has seen a major shift, with digital media overtaking television as the largest segment. This change has redefined content creation, distribution and monetization, focusing on information, escapism, materialism and self-actualization. In 2024, the M&E sector grew by 3.3% to INR2.5 trillion (US$29.4 billion), with digital media contributing 32% of revenues. The sector is expected to grow by 7.2% in 2025, reaching INR2.68 trillion (US$31.6 billion).

RISKS, CONCERNS, MANAGEMENT AND MITIGATION

The Board diligently employs risk management processes, reinforced by internal controls, to ensure that the Company achieves its strategic objectives and remains safeguarded against unforeseen circumstances. At GV Films, our focus is on becoming a sustainable business entity by acknowledging potential risks and establishing robust risk management policies. Now that Cinemas have reopened full fledgdely we are witnessing revival in production of movies and Theatrical Business.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a strong internal audit system in place, which is regularly monitored and updated to safeguard assets, comply with regulations, and promptly address any issues.

HUMAN RESOURCES

Your company maintains healthy, cordial and harmonious relations with all personnel.

CAUTIONARY STATEMENT

Statements made in the Management Discussion and Analysis and the Annual Report describing the Company’s objectives, projections, estimates, expectations may be forward looking statements within the meaning of applicable security laws and regulations in India and other countries. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the company’s operations include economic conditions affecting the domestic market in which the company operates, changes in the Government regulations tax laws and other statutes as well as other incidental factors and unforeseen circumstances.