Indra Industries Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

Global Growth:

• The world economy grew at an estimated 2.6% in FY 2024-25, according to the latest World Bank and IMF projections.

• Advanced economies registered subdued expansion of about 1.5%, while emerging market and developing economies grew by 4% on average.

• Chinas growth moderated yet remained solid, while the U.S. and Eurozone were slow, reflecting persistent global headwinds and elevated interest rates.

• Global trade volumes remained weak, and cross-border investment decelerated amid ongoing trade tensions and policy uncertainties.

Inflation:

• Global inflation continued its declining trend, falling to about 5.9% in 2024, though still above prepandemic averages. Advanced economies saw faster declines in inflation, approaching central bank targets sooner than emerging and developing economies.

• Tight monetary policy and unwinding of supply bottlenecks contributed to lower inflation readings in major economies, but core inflation, especially in the service sector, eased only gradually.

Risks & Policy Backdrop:

• Resuming geopolitical pressures, high interest rates, and frequent policy shifts contributed to global economic fragility and moderated growth momentum.

• The World Bank described the 2024-25 global environment as a "precarious moment," though resilience persisted with no systemic financial crisis.

• Governments in advanced and large developing economies remained focused on price stability and prudent fiscal management through late FY 2024-25.

B. INDIAN ECONOMY OVERVIEW (FY 2024-25)

• India retained its position as the fastest-growing major economy in the world.

• GDP growth for FY 2024-25 was estimated between 6.4% and 7.0%.

• The IMF and official estimates placed growth at the upper end, revising earlier forecasts upward as domestic demand outperformed expectations.

• Growth was bolstered by strong public investment in infrastructure, rebounding rural consumption, robust services exports, and a pickup in private spending.

• Inflation fell sharply, reaching 2.8% in May 2025 (lowest since 2019), well within the RBIs comfort zone.

• Exports hit a record $824.9 billion in FY 2024-25, despite a subdued global environment.

• The fourth quarter (Jan-Mar 2025) saw an acceleration to 7.4% annual growth, even as the full-year rate moderated compared to the post-pandemic rebound.

• The countrys expansion was broad-based, led by construction (up 10.8% in Q4), public administration, and a strong winter harvest.

• Weakness persisted in manufacturing and private investment, but rising government expenditure and rural demand helped offset softness in urban consumption.

C. EXTERNAL ENVIRONMENT & RISKS (FY 2024-25)

• Global conditions remained fragile: trade tensions, higher energy prices, policy uncertainty, and slowdowns in major advanced economies weighed on sentiment and cross-border investment.

• India stood out as an outperformer due to its resilient domestic demand, proactive reform agenda, and export competitiveness, even as many countries experienced the slowest growth since the pandemic.

• Risks for the year ahead include US and EU monetary tightening, supply shocks to food and energy, and continued volatility in global commodity markets.

Key Table: FY 2024-25 Economic Summary

Economy/Region	FY 2024-25 GDP Growth (%)	Inflation (%)
World	2.6	5.9
Advanced Econ.	1.5	3.0-3.2
EM & Dev. Econ.	4.0	7.0+
United States	~2.0	2.7-2.9
Eurozone	~1.0	2.5-2.8
China	4.8-5.0	2.0-2.3
India	6.4-7.0	2.8-5.3

D. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations are "forward-looking statements" within the meaning of applicable securities laws and regulations. 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 demand/supply and price conditions in the domestic and overseas markets in which the Company operates; changes in the Government regulations; tax laws and other statutes and incidental factors.

MEDIA AND ENTERTAINMENT INDUSTRY

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. The increasing availability of fast and cheap internet, rising incomes, and increasing purchases of consumer durables have significantly aided the industry. Indias media and entertainment industry are unique as compared to other markets. The industry is well known for its extremely high volumes and rising Average Revenue Per User (ARPU).

India is rapidly emerging as a global creative powerhouse, driven by its talent pool, cultural richness, and technological advancements. According to the EY report titled "A Studio Called India", the countrys media infrastructure is expanding, with animation and VFX costs in India being 40% to 60% lower than in the West, supported by a workforce of around 2,60,000 skilled professionals.

This significantly aided the countrys industry and made India leading in terms of digital adoption and provided companies with uninterrupted rich data to understand their customers better. India has also experienced growing opportunities in the VFX sector as the focus shifted globally to India as a preferred content creator.

MARKET DYNAMICS

Between 2 to 2.5 million digital creators are influencing over Rs. 29,60,300 crore (US$ 350 billion) in annual consumer spending, a number expected to surpass Rs. 84,58,000 crore (US$ 1 trillion) by CY30.

In the Union budget of FY26 the Ministry of Information and broadcasting received Rs. 4,358 crore (US$ 515.5 million).

The Indian entertainment sector could unlock an estimated Rs. 50,724 crore (US$ 6 billion) in unrealised value by FY30, according to a recent industry report. This growth potential is attributed to international collaboration, technology adoption, and strategic changes in content creation.

Indian advertising revenues is projected to grow at a CAGR of 9.4% to reach Rs. 1,58,000 crore (US$ 19.2 billion) in FY28, which is 1.4x the global average of 6.7%.

The online gaming and sports sector in India is growing at a CAGR of 19.2% and is projected to reach Rs. 39,583 crore (US$ 4.8 billion) by FY28.

The total music (live, recorded and digital) revenue grew from Rs. 2,416 crore (US$ 293 million) in FY19 to Rs. 6,686 crore (US$ 811 million) in FY23. It is expected to cross Rs. 10,899 crore (US$ 1.3 billion) by FY28, growing at a CAGR of 10.3%

OTT platform revenues in India are projected to grow at a remarkable CAGR of 14.9%, the highest among the top 15 countries, to reach Rs. 35,061 crore (US$ 4.25 billion) by FY28.

Indias Animation and VFX sector is projected to grow from US$ 1.3 billion in 2023 to US$ 2.2 billion by 2026, increasing its share of the media and entertainment (M&E) industry from 5% to 6%, according to a CII GT report.

Media companies are projected to achieve an 8% revenue growth, reaching US$ 7.14 billion (Rs. 60,000 crore) by FY27, driven by increasing contributions from the digital segment, according to a Crisil analysis of 20 companies that account for 55% of the media industrys revenue.

According to a report by ICRA, the revenue for the print media industry is expected to grow by 8-10% in FY25.

Indias Entertainment and Media (E&M) industry is set to outpace global growth, with a compound annual growth rate (CAGR) of 8.3%, projected to reach US$ 43.03 billion (Rs. 3,65,000 crore) by FY28. In the year 2023, the revenue from subscriptions for over-the-top video platforms across India amounted to approximately US$ 0.88 billion. This was expected to peak at over US$ 1.2 billion by 2026.

According to Media Partners Asias Asia Pacific Video & Broadband Industry 2024 report, Indias video market, encompassing both TV and digital, is projected to grow from $13 billion in 2023 to $17 billion by 2028.

The Indian media and entertainment sector posted a robust 19.9% growth in 2022 and crossed the Rs. 2 trillion (US$ 24 billion) mark in annual revenue for the first time led by a sharp jump in the digital advertising mop-up.

In 2024, the projected revenue in the Digital Media market in India is expected to reach US$ 10.07 billion. It is expected to contribute 38% to the overall advertising industry in India, on par with television.

RECENT DEVELOPMENT/INVESTMENTS:

Recent Developments in the Media and Entertainment Industry are :

• FDI inflows in the information and broadcasting sector (including print media) stood at Rs. 74,369 crore (US$ 11.56 billion) between April 2000- December 2024.

• Indias gaming market grew 23% YoY to US$ 3.8 billion in revenue in FY24.

• Pocket FM, an audio series platform, has raised $103 million in its Series D funding round, led by Lightspeed with participation from Stepstone Group

• Disney-owned Star India secured the TV broadcasting rights for the Indian Premier League from 2023 to 2027 through an online bid. During the same period, Viacom 18 won the bid for the digital streaming rights of the Twenty20 League.

• Major tech and e-commerce firms, including Google, Meta, Amazon, and Flipkart, saw their collective ad revenues rise 9% to over Rs. 60,000 crore (US$ 7.13 billion) in FY24.

• The Star-Viacom18 merger deal signed on February 28 will create an US$ 8.5 billion media goliath with a dominating presence in both TV and digital segments.

• In August 2023, Netflix inked a "first-of-its-kind" deal with Jio Platforms to bundle the streaming service with the carriers two pay-as-you-go plans as the American giant pushes to expand its subscriber base in the key Asian market.

• In June 2023, India, for the first time participated at the Annecy International Animation Festival in France and showcased the strength its creative economy holds.

• In May 2023, Viacom18-owned streaming service Jio Cinema inked a multi-year content deal with NBCUniversal (NBCU) to bolster its premium content library. As part of the partnership, Jio Cinema will get access to thousands of hours of NBCU films and TV series in India.

• Media company Shemaroo Entertainment is planning to spend Rs. 75 crore (US$ 9.1 million) in FY24 to bolster its broadcast and over-the-top (OTT) businesses.

• Newly merged multiplex giant PVR Inox is ready with a plan to add up to 175 new screens and retrofit a host of existing ones at an investment of Rs. 700 crore (US$ 85.1 million) during FY24.

• In April 2023, Prime Minister Mr. Narendra Modi commissioned Low Power FM Transmitters of capacity of 100 watt at 91 locations. These transmitters have been installed in 84 districts of 20 states. With this, the network of transmitters with All India Radio has increased from 524 to 615. The addition will further boost the coverage of AIR to 73.5% of the population of the country.

• A partnership was announced in April 2023 between the Ministry of Information & Broadcasting and Amazon India in the field of media, entertainment, and public awareness.

• The online gaming segment grew 22% to become the fourth largest segment of the Indian M&E sector in 2023, displacing filmed entertainment.

• Music from South Indian languages such as Kannada, Malayalam, Tamil, and Telugu have witnessed the fastest growth in the vernacular in the last four years in FY23. The highest contributor to OTTA with the non-film genre was Punjabi music (39%) across all states.

• In June 2022, the exclusive rights for the television broadcast of the Indian Premier League (IPL) from 2023-2027 was acquired by DisneyStar.

• In March 2022, Pocket FM in India raised US$ 65 million and has plans to expand in new regional languages.

• In March 2022, Krafton infused US$ 19.5 million in Indian audio content platform Kuku FM. GOVERNMENT INITIATIVES

The Telecom Regulatory Authority of India (TRAI) is set to approach the Ministry of Information and Broadcasting, Government of India, with a request to Fastrack the recommendations on broadcasting, in an attempt to boost reforms in the broadcasting sector. The Government of India has agreed to set up National Centre of Excellence for Animation, Gaming, Visual Effects and Comics industry in Mumbai. The Indian and Canadian Government have signed an audio-visual co-production deal to enable producers from both the countries exchange and explore their culture and creativity, respectively.

To ease filming in railways, the Film Facilitation Office (FFO) set up in the National Film Development Corporation (NFDC) collaborated with the Ministry of Railways to develop an integrated single window filming mechanism to streamline the permission process for filming across railway premises.

Digital audio-visual content including films and web shows on over-the-top (OTT) streaming platforms, as well as news and current affairs on online platforms, have been brought under the Ministry of Information and Broadcasting in November 2020.

ROAD AHEAD

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. Indias 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 Indias media and entertainment industry forward.