Photoquip India Ltd Management Discussions

Annexure III:

GLOBAL AND INDIAN ECONOMIC REVIEW

GDP Growth for FY26 showed exceptional resilience, growing at 7.4% in comparison to the FY25 growth of 6.4%. This performance was driven primarily by a buoyant services sector and a 7.0% growth in manufacturing. Additionally, the year witnessed the inflation level stabilizing near 4.5% in FY 2026. Indias Nominal GDP is estimated to have grown at 8.0%, reaching a level of 357.14 lakh crore. Contributing factors include a resurgence in the "Trade, Hotels, Transport, and Communication" sectors and sustained government capital expenditure.

The strong economic growth can be primarily attributed to the effective policies and initiatives undertaken by the Reserve Bank of India (RBI) along with the Indian Government. In addition to this, the Indian Government transformed the business environment of the country, attracting foreign direct investments (FDI) to the economy. In the year under review, India reached a historic milestone as foreign exchange reserves crossed USD 700 billion in early 2026, providing a robust buffer against global volatility.

The Indian media and entertainment (M&E) sector grew by 9% in 2025, reaching INR 2.78 trillion (US$32 billion), according to the latest FICCI-EY 2026 report.

This report contains forward-looking statements based on certain assumptions and expectations of future events. The Company, therefore, cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements can thus differ from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, based on any subsequent developments, information or events.

The Company trades in Digital Lights for Cinematography, Videography and Photography and its Accessories. The Company is an authorised distributor of Nanlite and Nanlux products of a renowned manufacturing Company from China. In addition, the company manufactures its own range of accessories under the brand name "NEXT". The Company, over the decades, has been foreseeing industry requirement and accordingly catering to the needs of the photographic and videography fraternity. We continue to be driven by the mission of equipping every photo and video professional with the best latest equipment.

Digital media officially became the largest segment of the M&E industry in 2025, crossing the INR 1 trillion mark for the first time. Digital advertising now accounts for 63% of total ad revenues, as brands shift spends toward measurable digital formats.

Experts predict the M&E sector in India to grow at a CAGR of 7% to reach INR 3.3 trillion by 2028.

Filmed entertainment: The segment saw revenues reach a record INR 205 billion in 2025. Over 1,900 films were released, and theatrical revenues rose 14% as audience footfalls for high-production-value cinema increased. Notably, 37 films grossed INR 100 crore or more at the box office, a significant jump from 17 films in 2023. Digital and satellite rights values, however, saw a rationalization of 8-10% as buyers focused on theatrical performance.

Live events: The organised segment was the fastest-growing sector, rising 44% to reach INR 145 billion in 2025. Growth was driven by premium ticketed concerts, personal events such as weddings, and large- scale public and religious gatherings. This surge has directly increased the demand for high-end lighting and specialized accessories.

OTT: With streaming platforms utilizing mobile plans and partnerships with local telcos, India remains the worlds fastest-growing OTT market. In 2025, paid video subscriptions reached 216 million across 143 million households. OTT revenues have increased significantly since 2019, with subscription-based services (SVOD) dominating 51% of the market.

E-commerce and D2C: The explosion of online shopping has made professional lighting a backbone for digital storefronts. E-commerce advertising surged 50% to 22,000 crore in 2025. High-quality visual content is now mandatory for conversion, leading to a rise in demand for "Nanlite" and "NEXT" products among D2C brands and automated photo studios for product photography.

Education and Ed-Tech: The shift toward hybrid learning has turned classrooms into broadcast studios. Institutions are investing in professional-grade lighting to ensure clarity for remote lectures. Your Company caters to this growing need for "lecture capture" setups that require high-reliability, continuous lighting systems.

Corporate and Professional Branding: Corporations are increasingly building in-house studios for webcasts, investor relations, and internal training. As firms move away from amateur setups to professional "studio-in-a-box" configurations, your Companys high-end fixtures are becoming the preferred choice for maintaining brand authority in a digital environment.

Your Company is committed towards enhancing liquidity, managing inventory, working capital management and managing demand and supply to the Company products. At Company level, going forward, it is our conviction that the transparent policies along with the stringent statutory compliances will propel the organized sector towards growth. The traditionally fundamentally strong character of the Indian economy would continue to operate in the future.