Inspire Films Ltd Management Discussions

The global economy continues to demonstrate resilience amid elevated uncertainty and shifting trade dynamics. Global growth is now estimated atB in 2025 and 3.1% in 2025 , slightly higher than earlier forecasts due to stronger trade activity ahead of anticipated tariff changes and supportive financial conditions. Headline inflation is expected to decline to 4.2% in 2025 and 3.6% in 2026 , broadly consistent with the April path, though inflation in the U.S. remains above target while Europe and Asia record softer trends. Growth composition shows distortions from tariff-driven front-loading rather than structural strength, with advanced economies growing at 1.5-1.6% and emerging markets at around 4% .

The U.S. economy is expected to expand 1.9% in 2025 and 2.0% in 2026 , aided by lower-than-announced tariff rates and fiscal stimulus from the OBBBA Act, while the euro area rebounds modestly to 1.0-1.2% growth . Chinas forecast has been raised to 4.8% in 2025 , driven by export momentum and tariff relief, and India remains one of the fastest- growing economies with 6.4% growth expected in both 2025 and 2026. Global trade volume is projected to rise 2.6% in 2025 before moderating in 2026 as temporary front-loading fades.

Risks remain tilted to the downside , dominated by potential tariff reinstatements, unresolved trade negotiations, and renewed geopolitical tensions in the Middle East and Eastern Europe that could disrupt supply chains and raise commodity prices. Fiscal vulnerabilities in several large economies?€”especially the U.S., France, and Brazil?€”may amplify market volatility through higher yields and tightening financial conditions. Conversely, a predictable and cooperative trade framework could lift sentiment, spur investment, and strengthen medium-term growth prospects.

The IMF emphasizes restoring confidence, fiscal buffers, and policy coordination . Governments are urged to pursue transparent, rule-based trade frameworks and targeted industrial policies while rebuilding fiscal space through growth-friendly consolidation. Central banks must balance inflation control with growth support amid diverging tariff impacts?€”maintaining credibility and clear communication to anchor expectations. Structural reforms in labor markets, education, and digital transformation, coupled with technological adoption and productivity gains, remain key to sustaining long-term resilience and inclusive global growth.

Source: IMF World Economic Outlook Update

Indian Economy

Indias economy continued to demonstrate resilience amid global uncertainties, maintaining strong macro-economic stability and steady growth momentum. Real GDP growth for FY25 is estimated at 6.4% , supported by a rebound in rural demand, rising private consumption, healthy services activity, and recovery in agriculture and industry. Agriculture output benefited from favourable monsoons and record kharif production, while industry grew on the back of robust construction and utilities, despite temporary weather-related disruptions. Services remained a key growth driver, supported by strong domestic demand and double-digit services export growth. Inflation moderated to 4.9% in FY25 (April-December) with headline inflation on a declining trend and expected to align near 4% in FY26, supported by prudent monetary and fiscal management. Banking sector stability strengthened further, with NPAs at a 12-year low of 2.6% , and external buffers remained comfortable with over ten months of import cover and healthy capital inflows. Looking ahead, Indias GDP growth for FY26 is projected in the range of 6.3-6.8% , underpinned by continued government capex, recovering private investment, improving labour markets, and rising formalisation. Policy focus remains on systemic deregulation, strengthening the MSME ecosystem, and enabling Ease of Doing Business 2.0 to unlock entrepreneurial productivity and boost competitiveness. The Survey highlights the need to sustain infrastructure build-out, accelerate skill development for an AI-enabled economy, and deepen structural reforms to support long- term growth and Indias vision of becoming a Viksit Bharat by 2047 . While external risks from geopolitical tensions and global trade policy shifts persist, strong domestic fundamentals, resilient services exports, remittance inflows, and robust macro-stability position India favorably for sustained medium-term economic expansion.

Source: PIB - GOI (Ministry of Finance)

Industry Outlook

Global Media & Entertainment Industry

The global Entertainment & Media (E&M) sector continued its steady expansion, with revenues rising 5.5% to approximately US$2.9 trillion in 2024 , and is projected to reach US$3.5 trillion by 2029 (CAGR ~3.7%). While growth is moderating in line with broader macro conditions, the industry remains structurally resilient, supported by rising digital engagement, technology-driven consumption patterns and evolving monetization models. Advertising has emerged as the primary growth driver, with d igital advertising expected to account for nearly 80% of total advertising revenue by 2029 , underscoring the sectors pivot to data-led content delivery. Connectivity services?€”both fixed and mobile?€” continue to form the largest revenue pool, expected to exceed US$1.3 trillion by 2029.

The streaming ecosystem remains a key growth engine, with global OTT revenues forecast to increase from US$169 billion in 2024 to US$230 billion in 2029 . The industry is expected to reach a pivotal point in 2027, when OTT consumer revenue surpasses traditional pay-TV for the first time. Platforms are increasingly adopting hybrid monetization models that combine subscription and virtual pay-TV offerings, alongside content bundling and flexible pricing strategies. Regional language content, short-form formats and enhanced user experience features continue to accelerate subscriber adoption, with scale and strong intellectual-property pipelines emerging as key competitive differentiators. With subscription growth maturing in developed markets, ad-supported video (AVOD) is rapidly gaining prominence and is expected to increase its share of total OTT revenue from ~20% in 2020 to ~27% by 2029. Platforms are expanding tiered offerings?€”balancing ad-light packages and premium ad-free experiences?€”while rising retail media investments and performance-driven advertising strengthen digital monetization. Similar dynamics are evident in the gaming segment, where advertising is expected to contribute ~39% of revenues by 2029 , provided platforms maintain optimal ad load experiences. Legacy media formats continue to see structural decline amid this digital shift.

Artificial Intelligence is reshaping the E&M value chain, moving beyond efficiency enhancements to become a core driver of content value and monetization . AI is accelerating production processes?€”in film, television, gaming and localization?€”while enabling personalized content discovery, predictive audience analytics and improved advertising precision, particularly across connected-TV and programmatic ecosystems. Generative AI is also transforming search behavior and creative workflows, prompting industry participants to redefine content strategies, pricing models and SEO frameworks. Companies investing early in AI capabilities, ethical frameworks and skilled talent are positioned to benefit from lower production costs, faster time-to-market, enhanced audience engagement and improved margins. Source: PWC

Indian Media & Entertainment Industry

Indias Media & Entertainment (M&E) industry continued its robust trajectory in 2024, crossing INR 2.5 trillion and marking a strong recovery beyond pre-pandemic levels. New-age digital consumption, rising broadband penetration, and smartphone adoption propelled the sector, even as traditional media segments faced a mild decline. The sector is projected to grow at 7% CAGR , reaching INR 3.07 trillion by 2027 , supported by rising disposable incomes, high smartphone adoption and Government initiatives to strengthen digital infrastructure.

Segment	2024	2025E	2026E	2027E	CAGR
Digital Media	802	903	1,004	1,104	~11%
Television	679	676	671	667	(1%)
Others	1,021	1,103	1,198	1,296	~8%
Total	2,502	2,682	2,873	3,067	~7%

All figures are gross of taxes (INR in billion)

Indias M&E sector is experiencing a fundamental rebalancing, with digital platforms leading growth, traditional media consolidating, and new-age verticals such as animation, gaming, and live events emerging as high-growth contributors. The convergence of technology, regional storytelling, and consumer interactivity is expanding monetization opportunities across formats.

Going forward, the industrys growth will hinge on three structural levers:

Digital acceleration driven by broadband and mobile-first audiences,

Regional and vernacular expansion enabling inclusive reach, and

Technology-led efficiencies through AI, automation, and virtual production.

Together, these forces are positioning India to become a globally integrated content powerhouse , exporting both creative talent and intellectual property to international markets while sustaining strong domestic growth.

Digital Media has emerged as the dominant force in Indias Media and Entertainment (M&E) industry, overtaking television to contribute over 32% of total revenues and establishing India as a truly digital-first entertainment economy. Powered by 945 million broadband users, 560 million smartphones, and over 120 million 5G connections, India now hosts the worlds second-largest online audience base. This digital infrastructure has revolutionized how consumers engage with content and how advertisers target audiences. Digital advertising , which surged to ?‚?1.28 trillion in 2024, now accounts for 61% of total ad spend, led by search, social, and video platforms. The rise of the creator and influencer economy ?€”with over 400,000 monetized creators?€”alongside AI-driven advertising, shoppable content, and real-time analytics, is redefining brand communication and ROI. Within this segment, short-form video, OTT streaming , and gaming/esports are driving rapid expansion, making digital media the undisputed growth engine of Indias entertainment landscape. This multi-format growth?€”fueled by interactivity, personalization, and mobility?€” positions Digital Media as the primary engine of Indias entertainment economy for the next decade.

Television remains Indias most pervasive and trusted medium , reaching over 800 million viewers across more than 100 million households . Television, while facing pressures on both subscription and advertising revenues, continues to retain significant scale and relevance, particularly in Tier-II and Tier-III markets. The segment continues to serve ~160 million television households , including 111 million pay-TV subscribers , reflecting its enduring reach and importance in mass entertainment consumption across the country. However, the segment faces structural revenue challenges . Advertising income declined 6% to INR 294 billion , while subscription revenues fell 3% to INR 385 billion, with average revenue per user (ARPU) stabilizing at ?‚?281 . The rise of connected TVs and OTT platforms is fragmenting audiences and ad spend. Nonetheless, regional language programming and **live sports?€”particularly cricket?€”**remain resilient growth pillars. Broadcasters are also diversifying their content pipelines through syndicated IPs and digital simulcasts. Recognizing shifting viewer preferences, major broadcasters have initiated a " TV + Digital" hybrid strategy , integrating linear broadcasting with OTT streaming to retain younger demographics and optimize advertising yields. This transition marks a crucial inflection point where television evolves from being stand-This marks a crucial inflection point, as television transitions from a standalone broadcast channel to a multi-platform ecosystem designed to retain relevance in a digital-first entertainment economy.

Indias OTT and subscription video ecosystem has revolutionized content consumption, moving audiences from family- based TV viewing to personalized , multi-device experience s. With 47 million paying households and over 140 million paid accounts, India ranks among the worlds fastest-growing streaming markets, expanding at 15-18% annually. In 2024 alone, OTT platforms produced over 2,600 hours of premium content across 22+ languages , showcasing the dominance of regional and dubbed storytelling. Domestic platforms like Aha, Hoichoi, and Chaupal are gaining ground against global players such as Netflix, Prime Video, and JioHotstar. Vernacular content now accounts for nearly 25% of OTT viewing time, while genres like crime thrillers, docu-series, and regional dramas fuel deeper engagement. AI- powered recommendation systems have enhanced user retention and watch time, making OTT services increasingly data-driven. The ecosystems convergence of convenience, diversity, and personalization has transformed it from a

niche digital service into a mainstream pillar of Indias entertainment economy.

The chart highlights a structural transformation in Indias media consumption landscape, where digital media now rivals television in total viewership share . While television continues to dominate reach across mass households, digital platforms?€”led by OTT , short-form videos, and social media?€”have captured over one-third of audience time , reflecting the countrys rapid shift to mobile and on-demand content. The rise of connected devices and regional OTT platforms is reshaping consumption patterns, compelling broadcasters and advertisers to adopt integrated "TV + Digital" content strategies to retain viewership and enhance monetization.

Indias OTT ecosystem has evolved into a richly diverse content landscape catering to a wide spectrum of audiences and languages. Drama and family sagas (28%) remain the most-watched category, reflecting Indias deep affinity for emotional, character-driven storytelling. Crime and thriller genres (22%) continue to gain traction, driven by immersive narratives and strong audience engagement across metros and smaller towns. Comedy (14%) and romance (10%) appeal to younger digital audiences seeking light, relatable entertainment, while reality shows and non-fiction formats (8%) are growing as live and interactive streaming increases. Docu-series and biopics (6%) are witnessing strong uptake among urban, educated viewers, complementing the rise of action and fantasy (7%) driven by youth and gaming- inspired content. Notably, regional originals (5%), including dubbed and subtitled productions, are expanding the OTT footprint across vernacular markets. Together, these genres underscore the fragmentation and personalization of Indian OTT viewership, where AI-led recommendations, multi-language availability, and mobile-first access are redefining content discovery and audience loyalty.

The Indian Media & Entertainment (M&E) industry operates in a fast-evolving ecosystem influenced by technological advancement, content digitization, and global integration. As the sector expands, it faces a set of critical risks that require proactive management and strategic oversight. Piracy and digital copyright infringements continue to threaten revenue streams, especially with the proliferation of online content-sharing platforms. Regulatory uncertainties around OTT platforms, advertising transparency, and data governance pose compliance challenges, while rising content acquisition costs and audience fragmentation are pressuring margins across digital and broadcast segments. Additionally, the advent of AI-based automation introduces concerns around data ethics, misinformation, and advertising fraud.

To mitigate these risks, industry players are increasingly deploying AI-driven RegTech tools for intellectual property protection, ad fraud detection, and compliance monitoring. Strengthened contracting frameworks and cybersecurity protocols are being embedded across production, distribution, and advertising supply chains to ensure content integrity and data privacy. Companies are also focusing on revenue diversification through hybrid monetization models such as AVOD, SVOD, and international syndication. Moreover, the integration of advanced analytics and dynamic pricing models enables better audience targeting and return on investment (ROI). Collectively, these measures enhance the industrys resilience, transparency, and governance maturity, reinforcing investor confidence and long- term sustainability.

The Indian M&E industry is on track to surpass USD 50 billion by 2029, underpinned by robust digital exports, a thriving creator economy, and AI-led efficiencies across content creation and monetization. The sectors growth trajectory reflects a clear shift toward a digital-first, data-driven, and globally competitive ecosystem, where India is transitioning from being primarily a content consumer to becoming a content exporter and innovation hub. Strategically, the industrys focus is on scaling vernacular OTT ecosystems to reach deeper into Tier-II and Tier-III markets, catering to Indias diverse linguistic base. The integration of AI and automation in creative and post-production pipelines is expected to reduce turnaround time and improve cost efficiency. In parallel, the establishment of AVGC-XR (Animation, Visual Effects, Gaming, Comics, and Extended Reality) Centers of Excellence will boost skill development, attract foreign collaborations, and enhance Indias competitiveness in global media outsourcing. Strengthening rights management and monetization frameworks will further safeguard Indian intellectual property and enable new revenue models.

Overall, Indias M&E industry is evolving into a multi-platform, globally integrated entertainment powerhouse, driven by creativity, technology, and inclusive access. Its future lies in balancing innovation with regulatory alignment?€” ensuring sustainable growth while positioning India as a global leader in digital storytelling and media exports.

Source: EY Report - "A Studio Called India" & IBEF - "Media & Entertainment Industry in India"

Review of Operations

Business Overview

Inspire Films Limited, established in January 2012 and headquartered in Mumbai, is one of the leading content creation, production, distribution, and exhibition companies. With over 40 projects completed, including 6,500 episodes and 3,000 hours of content, Inspire Films has earned more than 150 nominations and awards. The companys diversified revenue streams, including licensing, advertising, and syndication, ensure sustained growth and resilience in the dynamic media landscape. Inspire Films operates across three main business verticals: TV (Hindi GEC), Digital Content and Platforms (OTT), and Regional content.

Inspire Films has built a strong pedigree in Hindi General Entertainment Channel (GEC) content. During the year, the Company enhanced its slate for leading broadcasters, reinforcing long-standing relationships with networks such as Sony Entertainment Television, Colors TV, Star network and others. Inspire Films legacy of well-received shows continues to support a consistent television pipeline, backed by disciplined project execution and creative excellence. As audience preferences evolve and competition intensifies, the Company is focused on high-quality production values, differentiated narratives and deeper character-led story arcs to sustain engagement and strengthen visibility in the prime-time TV ecosystem.

Parallelly, the Company accelerated its digital content footprint under its dedicated youth-centric label, Freshh Mint. This vertical is aimed at capturing the fast-growing online content audience through premium-long form series as well as short-format storytelling. Following the encouraging reception of the Companys debut digital series Aukaat Se Zyaada, the label has established a strong foundation to scale digital IPs and build a sustainable community-led viewing base.

The regional content vertical remained a strategic focus, with initiatives to create high-quality content in multiple Indian languages. Regional entertainment continues to see increasing audience traction, driven by rising digital adoption across Tier-II and Tier-III markets. Inspire Films is actively leveraging this opportunity by developing stories that resonate with local cultures and sentiments and partnering with regional broadcasters and OTT platforms. The Company sees strong long-term potential in this segment, supported by favourable industry indicators and audience demand for authentic, diverse content.

Recent Highlights

The Companys creative slate for FY 2024-25 included multiple marquee developments. The launch of the FreshhMint YouTube channel, focused on bold, contemporary youth narratives, marked a significant step towards building a direct- to-audience content ecosystem. In the OTT space, production commenced on the series Pyar Paisa Profit, based on a bestselling novel, scheduled for release across Amazon Prime Video, MX Player and Apple TV platforms in May 2025. The Company expanded its broadcast pipeline by signing its next flagship fiction series, Dhaakad Beera, with Colors TV. Based on a social backdrop addressing honour-based violence, the show showcases Inspires commitment to socially relevant themes blended with mainstream entertainment. The series is currently under production and is expected to premiere on Colors TV and JioHotstar in July 2025. This addition reinforces the Companys growth trajectory in the Hindi GEC segment and enhances long-term visibility on television revenues. The Company entered into multiple short- format series deals with SonyLIV, with the first production currently in progress. This strategic initiative allows Inspire to tap into mobile-native consumption, build scalable IPs suited for social and Advertising-Video-On-Demand) AVOD platforms, and strengthen its presence among younger, digitally engaged audiences.

In FY 2024-25, the Company focused on broadening its content universe, expanding relationships across broadcasters and streaming platforms, and strengthening its in-house creative ecosystem. With multiple shows in development across television, OTT, and emerging digital formats, Inspire Films enters FY 2025-26 with a robust pipeline and sharper content positioning. Looking ahead, the Company aims to scale its IP base, enhance operational efficiencies, deepen talent partnerships, and explore selective regional expansion?€”all while maintaining fiscal discipline and value creation for stakeholders.

FINANCIAL REVIEW

FY25 was a transitionary year for the Company, with revenue and profitability impacted by industry-wide consolidation, moderation in commissioning activity, and strategic investments in digital IP development and creative capacity. Market realignments?€”including major broadcaster and OTT integrations?€”resulted in extended decision cycles and project delays, leading to higher work-in-progress at year-end. Despite these short-term challenges, the Company completed key projects in the prior year and strengthened its content pipeline, positioning it to benefit from monetisation and improved operating traction in FY26 as industry stability returns and content demand accelerates.

Particulars	FY25	FY24
Revenue from operations	777.12	3,036.82
Other Income	2.92	6.98
Total Income Expenses	780.04	3,043.80
Cost of Production & Changes in WIP	678.66	2060.21
Employee Cost	133.42	67.33

Other Expenses	274.67	337.87
Total Expenditure	1,086.75	2,465.41
EBIDTA	(306.71)	578.39
Interest	153.66	123.51
Depreciation	50.31	55.42
(Loss)/Profit Before Tax	(510.68)	399.46
Tax Expense	(0.56)	142.69
PAT	(510.12)	256.77

Currency: Indian Rupees in Lakhs

Revenue from Operations: Revenue from operations stood at ?‚?777.12 lakh in FY25 compared to ?‚?3,036.82 lakh in FY24, primarily reflecting a slowdown in commissioning activity and deferred production schedules during the year

as the industry underwent structural consolidation and content recalibration cycles.

Total Income: Total income for FY25 was ?‚?780.04 lakh versus ?‚?3,043.80 lakh in the previous year, largely in line with the movement in operating revenues.

. Expenses: Total expenditure amounted to ?‚?1,086.75 lakh in FY25 against ?‚?2,465.41 lakh in FY24, driven mainly by production-related costs of ?‚?678.66 lakh, higher employee investments at ?‚?133.42 lakh to support digital and

creative capability expansion, and other expenses of ?‚?274.67 lakh. The increase in employee cost reflects strategic strengthening of talent to build long-term content capabilities.

. Profitability: The Company reported an EBITDA loss of ?‚?306.71 lakh in FY25, compared to EBITDA of ?‚?578.39

lakh in FY24, primarily due to lower revenue recognition during the year and continued investment in digital IP

creation and production pipeline expansion, which are expected to contribute to future monetisation and margin improvement.

The Company is addressing these challenges through a focused diversification strategy across OTT, digital-first content, and regional markets, reducing dependence on traditional broadcaster cycles. Stronger partnerships with platforms, enhanced in-house creative development, and development of scalable IP will improve revenue visibility and monetisation. Simultaneously, tighter production planning, disciplined cost management, phased talent investments, and improved receivable controls are expected to support margin recovery. With a robust content pipeline and improved execution focus, the Company is positioned to benefit as industry commissioning stabilizes and demand strengthens in FY26.

RATIO ANALYSIS

Ratio	FY25	FY24	Change	Reasons
EBITDA (%)	(39.47%)	19.05%	(58.52%)	Sharp decline due to lower revenue recognition, commissioning delays, higher content development spend, and increased employee costs aligned to digital expansion.
Net Profit (%)	(65.64%)	8.44%	(74.08%)	The negative margin is due to operating losses and higher production costs.
ROE (%)	(16.38%)	7.62%	(24.00%)	Due to the volatility of the media industry in the current year, there is a reduction in the revenue and high operational expenditure.
ROCE (%)	(10.24%)	12.96%	(23.20%)	The decrease is due to operating losses and underutilization of resources.
Book Value (Total Assets-Liability excluding equity) (\u20b9 in lakhs)	2,859.26	3,369.37	(15.14%)	Reduction in net worth due to current-year loss and cost absorption during strategic transition
Fixed Asset Turnover Ratio (Times)	5.02	17.42	(71.18%)	Lower content delivery volume and slower commissioning cycle during industry consolidation phase.
Debt to Equity (Times)	0.47	0.20	135.00%	The increase is attributed to additional debt taken to support operational requirements and development of content creation.
Interest Coverage Ratio (Times)	(2.32)	4.23	(154.85%)	The decrease was driven by lower revenues, higher production costs, and increased finance expenses. The media industry faced a volatile year marked by market consolidations and strategic alliances that disrupted content acquisition, commissioning timelines, and programming strategies. These changes caused delays in several projects and extended the overall production cycle.
Current Ratio (Times)	3.02	6.80	(55.59%)	The decrease in the ratio is due to higher short- term borrowings and reduction in receivables.

FY25 ratios reflect a temporary dip driven by industry-wide commissioning slowdown, platform consolidation, and strategic investments in digital IPs, content pipeline, and talent. While profitability ratios weakened, liquidity remains healthy and the balance sheet continues to support growth plans. With content deliveries expected to accelerate and monetisation visibility improving in FY26, return metrics and leverage position are expected to stabilise.

Internal Control Systems & their Adequacy

Inspire Films Limited has established a robust internal control framework designed to safeguard assets, ensure the reliability of financial reporting, and promote compliance with applicable laws and regulations. The system of internal controls is regularly reviewed and updated to address emerging risks and challenges in the industry. Our audit committee, in conjunction with the internal audit function, plays a critical role in monitoring the effectiveness of these controls and ensuring their adequacy. This continuous evaluation process allows us to maintain high standards of operational efficiency and financial integrity, reinforcing our commitment to transparency and sound governance.

Human Resource Development

At Inspire Films Limited, we are dedicated to the development and well-being of our employees, recognizing them as our greatest asset. We have implemented a robust HR framework that includes structured performance appraisals, comprehensive learning management, and targeted training programs to support continuous growth and skill enhancement. Our HR policies foster a positive work environment through open communication, flexibility, and transparency, which enhances employee satisfaction and retention.

Cautionary Statement

This report may include forward-looking statements regarding the Companys objectives, projections, outlook, expectations, and estimates. These statements are based on certain assumptions and involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors beyond the Companys control, including economic conditions, regulatory changes, market dynamics, and operational challenges, may significantly impact our performance. The Company disclaims any obligation to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, to reflect subsequent developments or changes in circumstances