Music Broadcast Ltd Management Discussions

Overview:

The global economy continued to operate in a challenging and uncertain environment during FY25-26, marked by geopolitical tensions, trade fragmentation, financial market volatility and elevated policy uncertainty. Global growth is projected at approximately 2.7%, remaining below its long-term average. Against this backdrop, India maintained its position as the fastest- growing large economy globally, demonstrating resilience supported by strong domestic demand and sustained reform momentum.

As per the Economic Survey 2025-26, IndiaRs.s potential growth rate has been revised upward to 7.0%, reflecting improved infrastructure capacity, strengthening supply-side fundamentals and continued public investment. Real GDP growth is expected to remain at or near 7% over FY26-FY27, significantly outperforming global peers.

Growth has been supported by resilient private consumption, continued government-led capital expenditure and stable services sector performance. The expansion of physical infrastructure including airport capacity, freight corridors and inland waterways has improved logistics efficiency and reduced structural bottlenecks, enhancing productivity across sectors.

On the fiscal front, the Government has continued on its consolidation path while prioritising capital expenditure. The fiscal deficit for FY26 was contained at 4.4% of GDP, compared to the budgeted 4.9%, with a target of 4.3% of GDP for FY27. The focus on quality expenditure and infrastructure investment supports medium-term growth while reinforcing macroeconomic stability and investor confidence.

Inflationary pressures moderated during FY26, supported by easing food prices and improved supply conditions. Based on early estimates, the average Consumer Price Index (CPI) inflation for FY26 is expected to be in the range of 2.2% to 3.7%, following a headline inflation of 3.40% in March 2026. This marks a decline from the 4.6% to 4.8% range observed in FY25, indicating a softening of price pressures during the year. Core inflation remained relatively stable, reflecting contained underlying demand-side pressures, while the overall inflation trajectory benefited from favourable supply-side dynamics.

IndiaRs.s external sector demonstrated resilience despite global uncertainties. As per the latest data released by the Ministry of Commerce, IndiaRs.s total exports (merchandise and services combined) reached approximately Rs.71.4 lakh crore in FY 2025-26, registering a growth of 4.22%, compared to Rs.68.5 lakh crore in the previous year. Within this, merchandise exports stood at approximately Rs.36.7 lakh crore, reflecting modest growth of 0.93%, while services exports remained robust at approximately Rs.34.7 lakh crore, growing by around 7.94%.

The global outlook remains subject to downside risks, including potential trade disruptions, geopolitical escalation and financial market corrections. The Economic Survey outlines multiple global scenarios for 2026, ranging from continued managed

volatility to low-probability but high-impact systemic shocks. In this context, IndiaRs.s strong macroeconomic fundamentals including stable banking sector health, controlled inflation, fiscal consolidation and robust domestic demand provide relative insulation, though exposure to global capital flows and trade cycles remains a key monitorable factor.

In summary, India enters FY26-27 with real GDP growth near 7%, inflation trending below 4%, fiscal deficit consolidating toward 4.4% of GDP, and total exports reaching approximately Rs.71 lakh crore e. Supported by infrastructure-led expansion, policy reforms and domestic demand resilience, the macroeconomic environment remains conducive to sustained growth, notwithstanding global uncertainties.

Media and Entertainment Industry

The Indian Media & Entertainment ("M&E") sector witnessed strong growth of 9% Y-O-Y in 2025, reaching approximately Rs.2,78,500 crore, reflecting resilience and continued expansion driven by digital adoption and experiential consumption.

Digital media emerged as the largest segment of the industry, with revenues of approximately Rs.1,11,000 crore in 2025, driven by rapid growth in digital advertising, subscriptions, and e-commerce-led ad spends.

Advertising remained a key growth driver, increasing 13.5% to approximately Rs.1,50,000 crore, with digital contributing nearly 63% of total ad revenues, reflecting the continued shift toward targeted and performance-led platforms.

Traditional media continued to face structural pressures. Television revenues declined to approximately Rs.61,700 crore, impacted by lower linear TV advertising and a reduction in Pay-TV households, while the print segment remained stable at around Rs.25,900 crore, supported by marginal growth in advertising but offset by declining circulation.

Experiential segments showed strong momentum, with live events growing significantly to approximately Rs.14,500 crore, driven by higher spending on ticketed events, government initiatives, and large-scale cultural and religious gatherings.

The film segment recorded recovery with revenues reaching approximately Rs.20,500 crore, supported by strong theatrical performance and improved box office realizations, although digital and satellite rights values saw moderation.

Overall, the Indian M&E sector is expected to maintain steady growth, projected to reach approximately Rs.2,86,000 crore in 2026 and Rs.3,30,000 crore by 2028, driven by continued digital expansion and evolving monetization models.

Source: FICCI Report

Radio Industry

The radio industry witnessed a 7% decline in revenues in 2025, with total revenues moderating to approximately Rs.2,300 crore, continued structural challenges and a shift in advertiser preferences. Despite marginal growth in ad volumes (2%),

the impact of lower ad yields (down 9%) and a transition of inventory from high-yield metro markets to smaller towns resulted in overall revenue contraction. The industry remains under pressure and continues to operate below its longterm potential, highlighting the need for business model transformation and stronger monetisation strategies.

IndiaRs.s radio ecosystem remained extensive, with 1,510 operational stations, including 388 private FM stations, 591 All India Radio stations, and 531 community radio stations. However, the sector saw shutdown of a few private stations due to financial unviability, underscoring the economic stress within the industry. While radio continues to offer wide reach, its effectiveness as an advertising medium is being challenged by the rapid growth of digital audio platforms and streaming services, alongside the absence of FM receivers in many smartphones and newer car models.

Advertising trends remained subdued, with national advertisers especially FMCG reducing spends, while retail advertisers emerged as key contributors, accounting for a significant share of ad volumes (in some cases up to 75%). Additionally, over 12,700 brands advertised on radio in 2025, though the number of advertisers has declined for the second consecutive year, reflecting fragmentation of media budgets. Sectorally, services, auto, and BSFI continued to dominate ad volumes, contributing over half of total advertising activity.

Amid these headwinds, Non-FCT revenues have strengthened as a critical growth driver, contributing around 25% of total industry revenues, with some players exceeding 30%. Radio companies are increasingly diversifying into events, branded content, influencer marketing, podcasts, and on-ground activations, positioning themselves as integrated media solution providers rather than traditional broadcasters. However, while event-led revenues have grown, margins remain relatively modest (1015%), necessitating further innovation in monetisation models.

The industry also witnessed muted response to FM radio auctions, with only 62 licenses sold across 43 cities, primarily in smaller markets to complete network coverage. This indicates continued caution among broadcasters regarding the commercial viability of new stations.

Looking ahead, the radio industry is undergoing a strategic repositioning. Companies are increasingly focusing on hyperlocal content, community engagement, exclusive programming, and bundled offerings with digital and OOH media. The integration of radio with digital ecosystems particularly through OTT audio, podcasts, and data-driven targeting offers opportunities to enhance reach and advertiser ROI. Additionally, commuter

centric strategies combining radio, OOH, and digital media are emerging as effective tools for precision targeting and full- funnel marketing.

The operating model of the industry is also evolving, with a strong emphasis on cost optimisation, centralisation, Al-led content creation, and restructuring into leaner, audience- focused units. These measures are critical to address declining profitability and ensure long-term sustainability.

Outlook

The outlook for the radio sector remains stable but constrained, with revenues expected to remain largely flat in the near term and potentially decline to Rs.2,200 crore by 2028 if structural challenges persist. Growth will increasingly depend on non-FCT revenues, which are projected to contribute up to 39% of total revenues by 2028, reflecting a significant shift in the industryRs.s revenue mix.

While traditional radio faces competitive pressures from digital audio platforms, the medium continues to hold relevance due to its strong local connect, cost efficiency, and on-ground activation capabilities. The future of the industry will hinge on its ability to reinvent itself as a hybrid audio and marketing solutions platform, leveraging digital integration, data analytics, and innovative content formats.

With regulatory support, digital radio adoption, and continued diversification of revenue streams, the radio industry has the potential to stabilise and gradually evolve into a more resilient and diversified media segment in IndiaRs.s broader entertainment ecosystem.

Internal control systems and their adequacy

Adequate internal control has been put in place in all areas of operations. The role and responsibility of all managerial positions are established, monitored and controlled regularly. All transactions are authorised, timely recorded and reported truly and fairly. To ensure adherence to the laid-down systems, apart from formal Internal Audit System commensurate with the size and nature of the business. Internal audit is conducted by one of the big four accounting firms who periodically submit their report to the audit committee non- compliances if any. They also verify compliances with various applicable provisions of law.

The Company is fully committed to continually work in strengthening the systems and processes so as to achieve the highest degree of transparency, efficiency and accuracy in reporting, monitoring and decision making and has done so during the year as well as part of an on- going exercise.

Financial performance Profit and Loss:

(Rs. in lakhs- rounded off)

	Year ended March 2026	Percentage	Year ended March 2025	Percentage
Income
Revenue from operations	17,443.25	86.7	23,448.11	89.7
Other Income	2,168.49	10.8	2,362.59	9.0
Other gains and Losses	506.95	2.5	323.87	1.2
Total Income	20,118.69	100.0	26,134.57	100
Expenditure
Licence fees	1,933.79	7.5	2,015.31	6.7
Employee benefit expense	6,036.46	23.5	7,867.32	26.0
Depreciation and amortisation expense	2,756.53	10.7	3,461.77	11.4
Impairment of non-current assets	4,900	19.1	3,492.99	11.5
Net impairment losses on financial assets	90.07	0.3	1,493.60	4.9
Other expenses	8,926.01	34.8	10,808.20	35.7
Finance cost	1,040.90	4.1	1,159.04	3.8
Total Expenses	25,683.76	100.0	30,298.23	100.0
Profit/(loss) before tax	(5,565.07)	(4,163.66)
Income tax
-Current tax	-	-
-Deferred tax	(232.66)	(779.96)
Profit/(loss) for the year	(5,332.41)	(3,383.70)
Other comprehensive income(net of tax)	93.05	(11.04)
Total comprehensive income for the year	(5,239.36)	(3,394.74)

Revenue:

Total Income: Our total income decreased by 23% from Rs. 26,134.57 lakhs in FY 2025 to Rs. 20,118.69 lakhs in FY26, primarily due to decrease in revenue from operations by Rs. 6004.86 lakhs.

Revenue from operations: Revenues from operations representing Advertisement Revenue decreased by 25.61% from Rs. 23,448.11 lakhs in FY25 to Rs. 17,443.25 lakhs in FY26, mainly due to lower advertising demand and reduced inventory monetization.

Other income: The other income has decreased from Rs. 2,362.59 lakhs in FY25 to Rs. 2,168.49 lakhs in FY26 primarily represents interest accrued on fixed deposits and bonds.

Other Gains: This represents net fair value gain on financial assets mandatorily measured at fair value through profit and loss account, net gain on sale of investments and other miscellaneous income. Other gains have increased from Rs. 323.87 lakhs in FY25 to Rs. 506.95 lakhs in FY26.

Expenditure:

Total Expenditure: Our total expenses decreased by 15.23% from Rs. 30,298.23 lakhs in FY25 to Rs. 25,683.76 lakhs in FY26.

License Fees: Amounts paid towards license fees decreased by 4.05% from Rs. 2,015.31 lakhs in FY25 to Rs. 1,933.79 lakhs in FY26.

Employee benefits expense: Employee benefit expenses decreased by 23.27% from Rs. 7,867.32 lakhs in FY 2025 to

Rs. 6,036.46 lakhs in FY26, due to cost optimization and reduction in headcount.

Depreciation and amortisation expense: Depreciation and amortisation expense decreased by 20.37% from Rs. 3,461.77 lakhs in FY25 to Rs. 2,756.53 lakhs in FY26.

Impairment of non current assets financial assets: Impairment increased by 40.28% from Rs.3,492.99 lakhs in FY25 to Rs.4,900.00 lakhs.

Net impairment losses on financial assets: Net impairment loss decreased significantly by 93.97% from Rs. 1,493.60 lakhs in FY25 to Rs. 90.07 lakhs in FY26.

Other expenses: Decrease in other expenses is by 17.41% from Rs. 10,808.20 lakhs in FY25 to Rs. 8,926.01 lakhs in FY26 mainly due to reduction in programming and sales commission expenses.

Finance costs: Decrease in finance cost by 10.19% from Rs. 1,159.04 lakhs in FY25 to Rs. 1,040.90 lakhs in FY26; mainly on account of decrease in provision of Non-Convertible NonCumulative Redeemable Preference Shares (NCRPS) premium and interest on lease liabilities.

Tax expenses: Deferred tax credit of Rs. 232.66 lakhs in FY26 as compared to deferred tax credit of Rs. 779.96 lakhs in FY25.

Net loss for the year increased from Rs. 3,383.70 lakhs in FY25 to Rs. 5,332.41 lakhs in FY26, primarily due to the above.

Adjusting for items that will not be reclassified to profit and loss account, total comprehensive loss for the year was Rs. 5,239.36 lakhs in FY26 as against loss of Rs. 3,394.74 lakhs in FY25.

(i) Balance Sheet:

(Rs. in lakhs)

	2025-26	2024-25
Total Equity	44,534.31	49,773.67
Total Non-current Liabilities	2,514.84	2,766.09
Total Current Liabilities	2,542.81	13,977.30
Total Equity and Liabilities:	49,591.95	66,517.06
Total Non-current Assets	31,700.82	40,598.68
Total Current Assets	17,891.13	25,918.38
Total Assets:	49,591.95	66,517.06

Total equity comprises of Paid-up equity share capital, reserves and surplus and other reserves. The decrease in Reserves and surplus is due to loss for the year.

Non-current liabilities represent lease liabilities and employee benefit obligations expected to be settled after one year. Current year movement includes (i) no borrowings during the year (ii) decrease of Rs. 110.80 lakhs in lease liabilities and (iii) decrease in employee benefit obligations by Rs. 140.45 lakhs.

Current liabilities consist of lease liabilities, trade payables, other current financial liabilities and other current liabilities. The decrease in current liabilities is due to (i) repayment of borrowings (NCRPS) of Rs. 10,018.97 lakhs, (ii) decrease in trade payables (other than MSME) by Rs. 431.63 lakhs and increase in MSME dues by 3.56 lakhs, (iii) decrease in other financial liabilities by Rs. 450.96 lakhs, (iv) decrease in lease liabilities by Rs. 106.95 lakhs, (v) decrease in employee benefit obligations by Rs. 71.41 lakhs, and (vi) decrease in other current liabilities by Rs. 358.13 lakhs.

Non-Current Assets comprise tangible and intangible assets, right of use asset, long-term investments, financial assets, deferred tax assets, non-current tax assets and other non-current assets expected to be realizable after one year.

Tangible assets have decreased due to depreciation during the year and no major additions. Intangible assets have reduced due to amortisation cost for the current fiscal. Decrease in long term investments is due to maturity / liquidation of investments. Decrease in other financial assets is due to reduction in fixed deposits with banks. Increase in Deferred tax assets is mainly due to reduction of liability on fixed assets by Rs.1,539.90 lakhs and reduction of deferred tax asset due to MAT credit by Rs.1,341.51. Increase in current tax assets is due to higher advance tax / tax receivables.

Current Assets consists of short-term investments, trade receivables, cash and cash equivalents, other bank balances, other financial and current assets expected to be realisable within next twelve months.

Current investments have decreased due to reduction in short term investments. Trade receivables have decreased due to improved collections during the year. Cash and bank balances have reduced during the year. Other financial assets have also decreased. Other current assets have also decreased.

Further to the above, the financial ratios are as follows:

Sr. No Particulars	2025-26	2024-25
1 Debtors turnover	2.70	3.14
2 Inventory turnover	Not applicable	Not applicable
3 Interest coverage ratio	10.75	13.10
4 Current ratio	7.04	1.85
5 Debt equity ratio #	0.05	0.25
6 Operating profit margin (%)	2.62%	5.39%
7 Net profit margin (%)	-30.57%	-14.43%
8 Return on net worth (%)	-11.97%	-6.80%

The total outstanding debt of the Company is for lease liabilities of Rs. 2,363.84 lakhs.

Current ratio has improved primarily due to repayment of borrowings (NCRPS) and reduction in current liabilities during FY 26.

Interest coverage ratio has improved due to reduction in finance cost on account of repayment of borrowings during the year.

Operating profit margin, net profit margin and return on net worth have deteriorated due to reduced profit during the year.

Human Resources

At the heart of the Radio CityRs.s continued growth is its people

- individuals who bring creativity, resilience, and a deep understanding of evolving audience behaviors. Over the past year, the Human Resources function has focused on enabling this talent to thrive in a fast-changing media landscape by building capabilities, strengthening culture, and enhancing the overall employee experience.

Creating a Culture of Learning and Curiosity

In a business where content, platforms, and consumer expectations are constantly evolving, learning has remained a continuous journey. Through initiatives such as Knowledge Konnect, the organization created opportunities for its own talent to take center stage - sharing real work, real insights, and real solutions with teams across locations. This not only strengthened cross-functional understanding but also fostered a culture where learning is driven from within.

Complementing this, Digital Media Training programs equipped teams to navigate the expanding digital ecosystem

- from social media platforms to content creation and video editing. These efforts have enabled employees, particularly in programming and sales, to deepen audience engagement and build stronger digital-first capabilities.

Enabling Growth Through Structured Development

We continued to invest in structured learning interventions, ranging from skill development workshops to role-specific training programs. These initiatives have helped employees strengthen both functional expertise and everyday workplace effectiveness, ensuring they are better equipped to respond to business needs.

Early-career talent has also been a key focus area. Through campus hiring and structured training journeys, young

professionals are being nurtured to take on meaningful responsibilities early in their careers, contributing to live business challenges while learning under experienced leadership.

Building Stronger Connections Across the Organization

As the organization grows in scale and complexity, collaboration becomes critical. Platforms such as Collab Meet have played a pivotal role in bringing together teams across functions - Marketing, Sales, Programming, and Strategy - to align on priorities, solve challenges collectively, and share perspectives.

At the same time, Station Meets have ensured that communication remains grounded and inclusive at a local level - creating space for dialogue, recognition, and shared ownership of goals.

Celebrating People and Everyday Wins

A culture of appreciation continues to be a cornerstone of the organization. Recognition platforms such as Spotlight, Sher of the Quarter, and Cheers to Peers have enabled us to celebrate contributions - both big and small - reinforcing a sense of pride and belonging.

Beyond work, initiatives like Hobbies Masterclass have encouraged employees to explore interests outside their professional roles, strengthening team bonds and contributing to overall well-being.

Prioritizing Well-being and Balance

Recognizing that performance is deeply linked to well-being, we continued to invest in initiatives that support employees holistically. From everyday wellness engagement such as health

tips and wellness programs to enhanced benefits like insurance top-up options, the focus has been on enabling employees and their families to feel secure and supported.

Strengthening Talent for the Future

We continues to build a robust talent pipeline through campus hiring and structured development of management trainees. At the same time, succession planning initiatives ensure that high- potential talent is identified early and groomed to take on larger responsibilities, strengthening leadership continuity.

Creating Impact Beyond the Workplace

Through its Be the Change initiative, the organization has continued to extend its impact beyond business - supporting education and community development initiatives across multiple locations. These efforts reflect a broader commitment to contributing meaningfully to society.

Looking Ahead

As the media landscape continues to evolve, Radio City remains committed to building a workforce that is agile, skilled, and deeply connected to its purpose. By fostering a culture of learning, recognition, and well-being, the Human Resources function will continue to play a critical role in enabling both individual growth and organizational success.

As of March 31, 2026, Radio City employs 334 permanent employees. We remain dedicated to nurturing talent, fostering a culture of learning and innovation and creating a workplace where every individual can thrive and realise their full potential.