Graphisads Ltd Management Discussions

1. Economic Environment and Industry Overview

Indias macroeconomic environment in FY 2025 26 was characterised by broad-based resilience, structural momentum, and a series of landmark developments across the economy and the media and entertainment sector. Indias real Gross Domestic Product (GDP) grew at 7.8% in Q1 and 8.2% in Q2 of FY 2025 26, building on the 6.5% growth recorded in FY 2024-25. Government policies and public-sector initiatives play a pivotal role in shaping the Indian advertising industry. Strategic national programmes including ‘Digital India, ‘Make in India, ‘Startup India, ‘Khelo India, ‘Chalo India, PM Gati Shakti, and the Smart Cities Mission collectively drive advertising demand across central ministries, state governments, statutory bodies, and PSUs. These programmes generate both direct government advertising mandates and broader market activity by expanding entrepreneurship, digital literacy, and consumer awareness.

A defining moment for Indias media and entertainment ecosystem during the year was the inaugural World Audio Visual and Entertainment Summit (WAVES) 2025, held in May 2025 under the direct leadership of the Honble Prime Minister. WAVES 2025 placed India at the centre stage of the global creative economy and signalled Indias strategic intent to emerge as a world leader in media, entertainment, and creative industries. As Indias Media and Entertainment (M&E) industry approaches INR 2.7 trillion, WAVES represents a structural milestone for the sector. For companies like Graphisads, which operate at the intersection of advertising, events, creative services, and media, this development opens new institutional channels and reinforces the long-term demand outlook.

The Indian Advertising Market

The Indian advertising industry is in the midst of a sustained, decade-long expansion. The total Indian advertising market crossed INR 900 billion in 2024 and is projected to grow at a CAGR of approximately 9.37% to reach INR 2,100 billion by 2033, reflecting the consistent structural growth of advertising spend across both traditional and digital media in India. Digital advertising has now surpassed television to become the largest advertising medium in India, growing 19% in FY 2025 26, driven by Indias approximately 900 million internet users, the explosive growth of short-form video, social commerce, and programmatic advertising technology. The Out-of-Home (OOH) and Digital Out-of-Home (DOOH) segment. Graphisads core infrastructure business, continues to grow at over 11% per annum, driven by the digitalisation of outdoor inventory, expanding urban transit networks, and the adoption of programmatic DOOH technology by mainstream advertisers.

The Governments outlook plans for the economys support and development are expected to make the spending and contributions for factors such as tax buoyancy, a streamlined tax system with low rates, a thorough assessment and rationalization of the tariff structure, and the digitization of tax filing. After introduction of tax regimes and option for availing benefits as per the suitable income structure, the government is emphasizing awareness for filing the Income Tax and robust the economy with higher number of Taxpayers and high volume of Tax Income. The focused contact-based services are largely boosting its growth by unleashing the requirement in the current market scenario. The sectors success is being captured by a number of high-frequency indicators (HFIs) that are performing well, signaling the beginnings of a strong comeback.

The advertising sector in India is undergoing a significant transformation driven by the rapid integration of digital technologies, evolving consumer preferences, the growth of e-commerce, and the continued expansion of government communication budgets. Advertising media have expanded well beyond traditional formats to encompass digital screens, connected television, social media platforms, transit media, and experiential marketing, all of which represent operational verticals for Graphisads. The Company is well-positioned to serve this expanding market through its diversified, integrated, and infrastructure-backed service platform.

Considering all the business scenarios, government policies and initiatives and industry demand it is clear that advertisement industry has bright future in the coming years too and the rising number of media and entertainment models is strengthening the market growth in India. The available opportunities in hand are because digital media has become the mode of advertising and has become very vibrant showcase for everyone. We at Graphisads are ready to accept the challenge and have geared to equip ourselves with the latest technology and promising human talent.

2. Analysis of the performance of the Company

			Amount in Lakhs (INR)
	F.Y 2025-26		F.Y 2024-25		Percentage	Percentage
Particulars	Amount	% of Gross Income/ Exp	Amount	% of Gross Income/ Exp.	Change (Absolute)	Change (As % of Income/Exp.)
1. Total Revenue from Operations	8963.64	98.54	10726.84	95.91	-16.44	2.74
2. Other Income	133.09	1.47	457.72	04.09	-70.93	-64.06
Gross Income for the period	9096.73	100.00	11184.56	100.00	-18.67	0
Components of Expenditure
3. Cost of Advertisements	6376.21	72.67	8934.79	85.27	-28.64	-14.78
4. Directors Remuneration	69.6	00.79	60.00	00.57	16.00	38.60%
5. Salary & Wages to Employees	639.92	07.30	549.66	05.25	16.42	39.05%
Employees Benefit Expense (Total)	709.52	08.09	609.66	05.82	16.37	39.00
6. Finance Cost	178.18	02.03	109.41	01.04	62.85	95.19
7. Depreciation/Amortization	149.10	01.70	93.43	00.89	59.58	91.01
8. Other Operating Expenses	1361.16	15.51	730.67	06.97	86.28	122.53
Total Expenditure	8774.17	100.00	10477.97	100.00	-16.26	0
9. Profit before Tax & Exceptional Items	322.56		706.59		-54.35
Prior Period Items	42.92		15.31		180.34
Profit before Tax	279.64		691.28		-59.55
10. Tax Expenditure for the year	23.96		104.65		-77.10
Profit after tax	255.68		586.63		-56.42
Earnings Per Share	1.40		3.21		-56.39

Notes:

(1) Revenue from Operations: During the year under review, the Companys Total Revenue from Operations declined by 16.44% as compared to the previous financial year. This decline is attributable to a moderation in advertisement bookings and softer demand across certain segments of the Companys OOH/DOOH business. The management is taking proactive steps to consolidate its client base and revive growth momentum in the ensuing financial year.

(2) Cost of Advertisements: The Cost of Advertisements decreased by 28.64% in absolute terms, broadly in line with and marginally sharper than the decline in revenue from operations, reflecting the Companys continued cost discipline and its efforts to align direct costs with the level of business activity during the year. The management is regularly working to reduce costs by using advanced techniques and plannings and is confident of maintaining this effort for future too.

(3) Directors Remuneration: The Directors Remuneration increased during the year, in view of the enhanced involvement of the directors in the day-to-day affairs and strategic oversight of the Company, including matters relating to the capitalisation of major capital work-in-progress projects and continued compliance requirements consequent to the Companys listed status.

(4) Employee Costs: The Salary & Wages to Employees increased by 16.42%, and the total Employees Benefit Expense increased by 16.37%, notwithstanding the decline in revenue during the year. This is primarily attributable to annual increments and retention-driven compensation revisions, as the Company continued to invest in its human resources to support future business expansion.

(5) Finance Costs: The Finance Cost increased significantly by 62.85% in absolute terms and by 95.19% in proportionate terms, as compared to the previous financial year. This increase is on account of fresh borrowings availed by the Company for funding the capital expenditure on its ongoing projects, namely the NCUI Auditorium and the NDMC Public Utility project.

(6) Depreciation and Amortisation: The Depreciation/Amortisation expense increased sharply by 59.58%, consequent upon the capitalisation of the two major capital work-in-progress assets referred to above, namely the NCUI Auditorium and the NDMC Public Utility project, which were put to use during the year under review.

(7) Net effect: As a combined effect of the decline in revenue and other income, coupled with the substantial increase in finance cost and depreciation on account of capitalisation of new assets, the Profit before Tax and Exceptional Items declined by 54.35%, and the Profit before Tax declined by 59.55% as compared to the previous financial year. The Profit after Tax accordingly declined by 56.42%, and consequently the Earnings Per Share decreased by 56.39% during the year under review. The management remains confident that the assets capitalised during the year will contribute positively to the Companys revenue and profitability in the forthcoming financial years.

3. Work orders awarded and empanelments of Company

The operations of the company getting a momentum growth consecutively in its 3rd year since its IPO and it got various important empanelment and work orders thereafter. Few of them are given below including the new empanelments and ongoing one:

S. No. Awarding Authority	Particular of Work
1. Directorate of Tourism, Bihar	Empanelment of Media Agency
2. Small Industries Development Bank of India (SIDBI)	Empanelment of Advertising Activity
3. Andhra Pradesh Tourism Authority, Govt. of Andhra Pradesh	Empanelment of Event Management Agencies Category B - District Level Tourism and Culture Events Coordinated by District Tourism Council
4. Delhi Tourism & Transportation Development Corporation Limited	Empanelment of Event Management Companies
5. The Delhi Vidhan Sabha Event	Publicity Campaign and Exhibition
6. Celebrating India Film Festival (CIFF)	First Edition of Celebrating India Film Festival (CIFF 2025), held in New Delhi at NCUI Auditorium from 08th 10th August, 2025, brought together over 35 films spanning themes of heritage, culture, environment, and patriotism.
7. Delhi Tourism and Transportation Development Corporation (DTTDC)	The DTTDC has extended its contract with Graphisads Limited for the installation and maintenance of Street Furniture (SF) on PWD roads for a further period of Seven (7) years.

4. Human Resources Review

Graphisads recognises that its people are their most valuable asset and the foundation of its service quality, creative output, and client relationships. The Company maintained a workforce of approximately 100 employees during FY 2025-26, encompassing creative professionals, digital marketing specialists, project managers, event and exhibition executives, media planners, business development professionals, and administrative staff. All employees possess sound domain knowledge in their respective functions and are committed to the Companys values of quality, creativity, and client-focus.

The Companys human resource philosophy is built on four principles:

Attracting talent through competitive, merit-based recruitment with a focus on diversity and equal opportunity;

Developing talent through continuous online and offline training across functional, managerial, and technology domains;

Retaining talent through performance-linked compensation, recognition, and a positive workplace culture; and

Protecting talent through a safe, hygienic, dignified work environment with zero tolerance for harassment or discrimination.

The Company continues to promote gender equality in all recruitment, compensation, and career development processes, ensuring that every employee is accorded equal opportunity and respect irrespective of designation, background, or gender. The Company has a fully functional Internal Complaints Committee (POSH Committee) in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which remains vigilant and responsive to any workplace concerns. The Company is pleased to report a harmonious and respectful work environment during the year under review. Staff welfare initiatives, including family engagement activities and stress management programmes, were conducted during the year to maintain high employee morale and organisational cohesion.

We at Graphisads plan and have various entertainment and stress release sessions and we had also provided staff and family tours for our employees.

5. Opportunities and Threats

The day to day changing business parameters and the current dynamic business scenario which is filled with rapid changes in technology, government policies, mounting competitive threats and constant new entrants into market, higher competitions, all collectively makes it challenging to sustain and handle the intricacies and provide competitive solutions to the clients.

We, in the advertising and media industry, face competitions from domestic as well as international companies. We foresee this competition to continue to grow as the demand for advertising and monetizing solutions increases. Further we believe that our competition also depends on several factors which include changing business framework, market competition at cut-to-cut rates, changing information technology policies and frame works, difficult to retain skilled staff etc.

We currently operate nationally from our offices in the National Capital of the Country. We believe that we can extend our marketplace platform through nationwide expansion to help automate and improve advertising for buyers and sellers PAN

India. We intend to grow our market share in our existing national market.

Opportunities

The following strategic opportunities are identified by the management as the most significant near-to-medium-term growth drivers for the Company:

Infrastructure Assets Now Generating Revenue: The NCUI Auditorium and Convention Centre and the NDMC Public Utility network, both capitalised during FY 2025-26, are now fully operational and actively generating revenues. These long-duration institutionally endorsed assets are expected to contribute meaningfully and increasingly to the Companys top line and profitability in the coming years.

Expanding Transit Advertising Platform: As the Indian Railways continues to expand the Vande Bharat Express fleet to new routes and geographies, the addressable in-train advertising inventory operated by the Company is expected to grow organically and significantly, without incremental capital investment.

Digital and DOOH Growth: The DOOH segment is growing at over 11% per annum nationally, with North India accounting for approximately 29% of the national DOOH market. The Companys LED screen networks and public utility assets are well-positioned to attract programmatic DOOH demand as the market matures.

Expanded Institutional Empanelment Base: New empanelments with NIFTEM, UIDAI, Bihar Tourism, NTPC, IRCTC, HUDCO, NHB, THDC, and the Governments of Maharashtra and Punjab significantly expand the Companys addressable institutional market and provide a stable, recurring pipeline of work orders.

Proprietary Event Properties: CIFF 2025 establishes a blueprint for the development of annually recurring, proprietary cultural and thematic event properties that generate compounding brand equity, repeat revenue, and national recognition.

Subsidiary Contribution: Spike Advertising Private Limited, the Companys Wholly Owned Subsidiary, delivered a PAT of Rs. 171.91 Lakhs in FY 2025-26, contributing 40.20% of consolidated Group PAT. The subsidiarys growing revenue base (Rs. 7,092.47 Lakhs, up from Rs. 5,642.06 Lakhs) represents an expanding source of Group revenue and profitability.

Threats

The management acknowledges the following threats and competitive pressures in the current operating environment:

Intensifying Competition: The advertising industry faces competition from domestic and international agencies, including well-capitalised multinational agency groups and technology-driven digital marketing platforms. The pace of new entrants, particularly in digital marketing, continues to intensify.

Technological Disruption: Rapid advances in AI-driven creative tools, programmatic advertising, and social media platform algorithms require continuous and capital-intensive technology adoption to remain competitive. The pace of change in this domain presents both an opportunity and a threat.

Regulatory Changes: Changes in outdoor advertising regulations, municipal permissions, public space utilisation policies, and digital content standards may impose additional compliance obligations or constrain operational flexibility, particularly for the Companys OOH and DOOH operations.

Concession Renewal Risk: Key revenue-generating concessions, including those with Indian Railways and NDMC, are subject to periodic renewal. While the Companys strong track record supports renewals, adverse revisions or non-renewals could materially affect revenues.

Macroeconomic Sensitivity: Advertising expenditure is correlated with GDP growth and corporate profitability. Any sustained economic slowdown or sector-specific downturn could lead clients to reduce or defer advertising budgets, impacting the Companys revenue across service verticals.

6. Risk Management

The Board of Directors of Graphisads Limited has established a comprehensive Risk Management Policy to ensure that material risks to the business are identified, assessed, monitored, and mitigated in a structured and timely manner. The Board has ultimate ownership of risk governance, while the senior management team is responsible for day-to-day implementation. The table below sets out the key risk categories, their descriptions, and the Companys mitigation strategies:

Risk Factor	Risk Description	Risk Mitigation Plan
Business Continuity Risk	Unforeseen events such as natural calamities, pandemics, or civil disruptions may impact operations, client servicing, and revenue generation.	The Company has a robust Business Continuity Plan (BCP) incorporating Work from Home protocols, event-specific succession planning, and Standard Operating Procedures for disruption scenarios.
Market & Revenue Risk	Adverse macroeconomic conditions or sector- specific downturns may cause clients to reduce or defer advertising budgets, impacting revenue across service verticals.	The Company maintains a diversified client base across government, PSU, corporate, and real estate segments, reducing dependence on any single client category. Market intelligence is continuously tracked.
Technological Disruption Risk	Rapid advancement in AI-driven advertising tools, programmatic DOOH technology, and digital media platforms may render existing models less competitive.	The Company continuously invests in staff upskilling, technology adoption, and updated software infrastructure. Regular training programmes and technology audits are in place.
Credit / Receivables Risk	Delayed payments or defaults by clients may adversely impact the Companys liquidity position and working capital cycle.	A dedicated receivables management team monitors outstanding dues in a time-bound manner. Corrective action plans are activated proactively upon early signs of delay.
Regulatory & Compliance Risk	Changes in outdoor advertising regulations, municipal permissions, public space policies, data privacy laws, or SEBI LODR requirements may impose additional obligations.	An active compliance management framework overseen by the Company Secretary ensures continuous monitoring of regulatory changes and timely compliance.
Concentration /	A portion of the Companys transit advertising	The Company initiates concession renewal strategies
Concession Risk	revenue depends on concession agreements with Indian Railways and NDMC. Non-renewal on acceptable terms could affect revenues.	well in advance. Its strong on-ground track record and institutional relationships support renewals. Geographic diversification is actively pursued.
Fraud Risk	Risk of intentional deception or dishonest conduct by employees, vendors, or external parties that could damage the Companys reputation and financial position.	The Board and senior management maintain active oversight of fraud prevention. An internal control framework, whistle-blower policy, and vendor verification protocols are in place.

7. Internal Controls and Their Adequacy

Graphisads has established a robust internal control framework commensurate with its size, scale, and operational complexity. The framework is designed to provide reasonable assurance regarding the reliability of financial reporting, the effectiveness and efficiency of operations, and compliance with applicable laws, regulations, and the Companys internal policies. Key controls include a clearly defined organisational structure with demarcated roles and responsibilities, documented Standard Operating Procedures across key business processes, dual authorisation requirements for significant financial commitments, periodic internal audits reviewed quarterly by the Audit Committee, and robust IT controls including access management and data backup protocols.

The Audit Committee of the Board of Directors oversees the adequacy and effectiveness of the internal control framework and reviews internal audit reports, management responses, and action-taken reports on a periodic basis. The Statutory Auditors have assessed the Companys internal financial controls over financial reporting and have reported that the controls are adequate and operating effectively. The Company is committed to continuously strengthening its internal control systems in line with business growth and evolving best practices.

8. Cautionary Statement

The Management Discussion and Analysis Report and the statements made thereunder are based on the managements current knowledge, expectations, estimates, projections, and assumptions regarding the Company and the industry in which it operates. These statements reflect managements views as of the date of this Report and should be considered as forward-looking statements only. Actual results, performance, and outcomes may differ materially from those expressed or implied herein due to changes in market conditions, regulatory frameworks, macroeconomic conditions, availability of resources, competitive dynamics, technological developments, and other factors beyond the Companys control. The Company does not undertake any obligation to update or revise any forward-looking statement contained herein, whether as a result of new information, future developments, or otherwise.

Internal Control System

We at Graphisads, have established a robust, comprehensive, and well-structured Internal Control System that is commensurate with the size, scale, and nature of our operations. Our control framework is designed to ensure operational discipline, enhance efficiency, safeguard the Companys assets, and promote compliance with applicable policies, regulations, and internal standards.

Stringent control mechanisms and well-defined processes are implemented across all business segments to enable effective monitoring, timely identification of risks, and appropriate corrective action. These systems are further strengthened through regular audits, internal reviews, and periodic checks, ensuring the quality of processes and adherence to established policies and procedures.

The active involvement and oversight of the Board of Directors and Senior Management in the Companys affairs further reinforces our internal control environment. Their continuous guidance and supervision ensure that key operational and strategic decisions are aligned with the Companys objectives, governance framework, and long-term interests of our stakeholders.

While designing and implementing our Internal Control Systems, the following key principles have been duly considered:

Clearly defined roles, responsibilities, and accountability across functions.

Appropriate checks and balances and segregation of duties.

Robust processes for monitoring operational and financial activities.

Regular internal audits, reviews, and compliance checks.

Timely identification and mitigation of operational and financial risks.

Continuous evaluation and improvement of processes and controls.

Effective oversight by the Board and Senior Management.

Alignment of controls with the Companys growth, evolving business requirements, and stakeholder expectations.

We remain committed to continually strengthening our internal control framework to ensure transparency, accountability,

operational excellence, and sustainable value creation for all our stakeholders.

The following points have been duly borne in mind while designing these control systems:

1. It should be ensured that proper accounting records are maintained to identify at every time the revenue, cost, expenses, creditors, debtors, loans & borrowings etc. so as there is no slippage in management decisions with respect to any matter.

2. The financial reporting should be reliably ensured.

3. All the business transaction are properly authorized, recorded and reported to the Management.

4. Operations should be vigilantly and sensibly monitored.

5. The assets of the Company are duly protected from unauthorized use or losses, adequate insurance coverage is in place at all times and compliances with applicable regulations is met.

6. Accounting Standards for properly maintaining the books of accounts and reporting financial statements are followed.

7. The efficacy of the control system is validated by internal auditors and re-examined by the management.

For the Financial Year 2025 26, the Board has appointed Mr. Shobharam Dhama, Company Secretary, as the Internal Auditor of the Company, entrusting him with the responsibility of evaluating the adequacy and effectiveness of the Companys internal control systems, monitoring compliance with applicable laws, rules, regulations, and statutory requirements, and assessing adherence to established management policies and procedures. The Internal Auditor has been entrusted with a comprehensive and clearly defined mandate to undertake periodic reviews, identify potential gaps, weaknesses, deviations, or instances of non-compliance, and promptly report any shortcomings or areas requiring corrective action to the appropriate management authority. This structured internal audit mechanism reinforces the Companys commitment to strong governance, regulatory discipline, transparency, accountability, and continuous improvement, while providing the Board and Management with greater assurance over the effectiveness of the Companys control environment.

The Board oversees the overall process of risk management throughout the organization. Business Heads and Support Function

Heads are also responsible for establishing effective internal controls within their respective functions.

1. Client Consultation and Strategy Development

Understand the clients goals, target audience, and business needs. Develop a clear marketing strategy aligned with the clients objectives.

2. Creative Brief and Conceptualization

Prepare a creative brief outlining the campaigns message, audience, tone, and requirements. Develop creative ideas and concepts based on the brief.

3. Creative Design and Content Creation

Create visual designs, copy, videos, graphics, and other campaign content. Ensure all materials reflect the brand identity and campaign objectives.

4. Media Planning and Buying

Identify the most effective media channels for reaching the target audience. Plan budgets, placements, schedules, and purchase advertising space.

5. Production and Execution

Turn approved creative concepts into final campaign materials. Coordinate production activities and ensure everything is delivered according to schedule.

6. Digital Marketing and Social Media

Promote the campaign through websites, search engines, email, and social media platforms. Create engaging content and manage online audience interactions.

7. Monitoring and Analysis

Track campaign performance using relevant metrics such as reach, engagement, conversions, and ROI. Analyze results to identify what is working and what needs improvement.

8. Reporting and Client Communication

Prepare regular reports showing campaign progress and performance. Communicate results, challenges, and recommendations clearly to the client.

9. Feedback and Optimization

Collect feedback from the client and audience and use it to improve the campaign. Adjust content, targeting, budget, or strategy based on performance data.

10. Project Closure

Complete all final deliverables, documentation, and financial processes. Review the overall project, record key learnings, and formally close the campaign.