SDC Techmedia Ltd Management Discussions

1. GLOBAL ECONOMIC SCENARIO

According to the IMF World Economic Outlook (April 2026), global economic growth is projected at 3.1% in 2026 and 3.2% in 2027, reflecting resilience despite geopolitical tensions, trade disruptions and heightened uncertainty. While growth remains positive, the global economy faces risks from ongoing Middle East conflicts, inflationary pressures, supply-chain disruptions and slowing investment activity.

Advanced economies are expected to witness relatively subdued growth due to tighter financial conditions and structural constraints, while emerging and developing economies will continue to remain key contributors to global growth. Inflation is expected to rise moderately in the near term before resuming its downward trajectory. Despite short-term challenges, supportive policy measures, technological advancements and improving trade conditions are expected to aid recovery over the medium term.

GDP Growth Across Major Regions

Emerging and Developing Asia is expected to remain the fastest-growing region globally, led by India, while Chinas growth is projected to moderate due to structural challenges and weakening domestic demand. Latin America, Emerging Europe, the Middle East and Sub-Saharan Africa are expected to record moderate growth, although geopolitical risks, commodity price volatility and financing constraints may influence performance.

Overall, global growth is expected to moderate in the near term, with emerging markets continuing to outperform advanced economies and supporting long-term economic momentum.

2. INDIAN ECONOMY

India continues to remain the fastest-growing major economy globally, supported by strong domestic consumption, rising investments, favorable demographics and government-led infrastructure spending. The countrys economic resilience, combined with structural reforms and increasing global competitiveness, positions it among the most attractive growth markets worldwide.

a. Gross Domestic Product (GDP)

As per the second advance estimates released by the Ministry of Statistics and Programme Implementation (MOSPI), Indias real GDP is estimated to grow by 7.8% in FY 2026-27, while nominal GDP is expected to grow by 8.6%. India surpassed the USD 4 trillion GDP milestone and is projected to become the worlds third-largest economy by 2030.

Strong growth has been driven by manufacturing, services, investments and private consumption. India also strengthened its strategic influence globally, ranking among the leading powers in the Asia-Pacific region due to its economic strength, demographic advantage and growing geopolitical significance .

b. Gross Value Added (GVA)

Indias real GVA is estimated at 294.4 lakh crore in FY 2025-26, registering growth of 7.7%, while nominal GVA is expected to increase by 8.7%. Manufacturing remains a key growth driver, supported by strong performance across secondary and tertiary sectors.

Growth in trade, hospitality, transport, communication and allied services, along with strong levels of private consumption expenditure and capital formation, continue to support broad-based economic expansion.

c. Key Demographic and Consumption Trends

Population Growth

Indias population increased from approximately 0.75 billion in 1984 to around 1.47 billion in 2025, creating one of the worlds largest consumer markets and labour pools. This demographic advantage is expected to support long-term economic growth and consumption.

Labour Force

Indias labour force increased from about 468 million in 2010 to nearly 618 million in 2025, reflecting rising workforce participation and sustained economic activity. The growing working-age population presents significant opportunities, while also highlighting the need for continued employment generation.

Disposable Income and Consumer Spending

Rising incomes continue to strengthen domestic demand. Per capita Gross National Disposable Income (GNDI) increased to approximately 2.49 lakh in FY 2025-26, while per capita Private Final Consumption Expenditure (PFCE) reached about 1.38 lakh. The increase in household spending reflects improving consumer confidence and supports growth across consumption-driven sectors.

d. Union Budget FY 2026-27 Highlights

The Union Budget FY 2026-27 focuses on accelerating economic development through infrastructure expansion, MSME support and agricultural reforms.

Key initiatives include:

Increased capital expenditure of 12.2 lakh crore to strengthen infrastructure development. Creation of an Infrastructure Risk Guarantee Fund to support private sector participation. Enhanced support for MSMEs through dedicated funding, credit access and trade receivable financing initiatives. Sector-specific schemes for coconut, cocoa, cashew, sandalwood and horticulture crops to improve farmer incomes and exports. Measures to strengthen entrepreneurship, employment generation and inclusive economic growth.

These initiatives are expected to support investment activity, boost demand and create long-term opportunities across multiple sectors.

3. MEDIA AND ENTERTAINMENT INDUSTRY IN INDIA

Indias cinema industry continues to benefit from strong structural growth opportunities, driven by favorable demographics, rising disposable incomes and significant under-penetration of organized cinema infrastructure.

Despite being one of the worlds largest film-producing nations, India has approximately 10,000 screens for a population of 1.45 billion, resulting in one of the lowest screen densities globally. More than 16,000 pin codes remain without cinema access, creating substantial opportunities for multiplex expansion, particularly in Tier II and Tier III markets.

The industry is witnessing a gradual shift from single-screen cinemas to modern multiplex formats, supported by growing demand for premium movie-going experiences and higher consumer spending on entertainment.

Indian Box Office Performance

The Indian box office recorded a strong recovery during CY 2025, led by: Revival in Hindi cinema. Strong growth in English-language content. Continued success of regional films across India. Increasing popularity of re-released classic films.

Growth in alternative content such as anime, concerts, sports screenings and live events.

The number of films crossing major box-office milestones has increased, indicating broader audience engagement and greater diversity of successful content.

Key Growth Drivers for Multiplexes:

a. AI-Driven Content Expansion

Artificial Intelligence is increasing content creation across entertainment platforms. While content availability is expanding, theatrical cinema benefits from offering a unique immersive experience that cannot be replicated through digital consumption.

b. Cinema and OTT Coexistence

Cinema and OTT platforms increasingly complement rather than compete with each other. While streaming serves convenience and on-demand viewing needs, theatrical exhibition continues to fulfill consumers demand for premium, social and immersive entertainment experiences.

c. Growth of Premium Formats

Formats such as IMAX, 4DX, Dolby Cinema, ScreenX and ICE continue to drive higher realization and consumer engagement, strengthening the premiumization trend within the industry.

d. Alternative Content Opportunities

Concert films, anime, gaming events, comedy specials and live sports screenings are expanding content diversity, improving asset utilization and reducing dependence on traditional movie releases.

e. Digital Influence on Consumer Discovery

Social media platforms have become important channels for content discovery and audience engagement, strengthening marketing effectiveness and consumer reach. f. Experience Economy and Wellness Trends

Consumers increasingly value out-of-home experiences that promote social interaction, emotional engagement and wellbeing. Cinema continues to benefit from this broader shift toward experiential consumption.

g. Rising Affluence and Cultural Content

Indias growing affluent population is driving demand for high-quality content centered on Indian heritage, culture, history and mythology, creating significant opportunities for theatrical exhibition

4. THE ROAD AHEAD

The long-term outlook for the Indian cinema exhibition industry remains highly positive. Rising incomes, rapid urbanization, favorable demographics and significant under-screen penetration continue to create substantial growth opportunities.

The Company remains focused on expanding its footprint through asset-light and capital-efficient models, particularly in underserved markets. Investments in premium formats, customer experience, digital engagement and alternative content will remain key growth drivers.

The Company will continue to leverage technology, strengthen customer loyalty programs, enhance food and beverage offerings and optimize operational efficiencies to improve profitability and long-term value creation.

5. RISK FACTORS & CONCERNS

a. OTT Competition Risk

Continued investment in premium cinema formats and consumer experience differentiates theatrical exhibition from digital entertainment platforms.

b. Changes in Government policies:

Factors like Changes in GST rates, entertainment tax policies, affects the cinemas tickets rates resulting in audience preferring watching the movie over OTT platform instead on big screen, This may result in loss of revenue for the cinema industry.

6. RISK MANAGEMENT & INTERNAL CONTROLS

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. The Company has identified various risks and also has mitigation plans for each risk identified. The Risk Management Policy of the Company is available on o ur website https://www.sdctech.in/InvestorRelation.phpRsact=Policy.

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

7. DISCUSSION ON FINANCIAL PERFORMANCE:

During the year under review, the Company has incurred Net Loss of Rs. 211.59 lacs as compared to Net Profit of Rs. 34.84 Lacs in previous year. Your directors are continuously looking for avenues for future growth of the Company in Media and Entertainment Industry.

Particulars	31.03.2026	31.03.2025	Reasons for Change of 25% or more
Debtors Turnover	1.44	1.75	NA
Interest Coverage Ratio	(1.06)	(0.74)	Purchase of stock decreased by 43%
Current Ratio	2.61	3.4	NA
Debt Equity Ratio	152.13	4.52	Loss in the Current Year which decreased the Shareholder value by 97%
Operating Profit Margin	(0.12)	(0.95)	Increase in Expenses (advertisement content share) 2.56 times
Net Profit Margin	(0.22)	0.03	Decrease in revenue by 14.5% & increase in expenses by 7.6%
Return on Net Worth	(0.33)	0.17	Decrease in revenue by 14.5% & increase in expenses by 7.6%

8. MATERIAL DEVELOPMENT IN HUMAN RESOURCES:

The Company firmly believes that human resources is an important instrument to provide proper communication of the Companys growth story to its stake holders and plays vital role in the overall prospects of the Company. So the Company takes possible steps for the welfare of its manpower. The employee relationship was cordial throughout the year. We as on 31st March, 2026, have 54 permanent employees on our rolls.

9. CAUTIONARY STATEMENT

Statements in Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include a change in government regulations, tax laws, demand, supply, price actions, economic and political developments within and outside the country and such other factors.

By order of the Board of Directors
FOR SDC TECHMEDIA LIMITED

Sd/-	Sd/-
FAYAZ USMAN FAHEED	SAMIA FAHEED
(DIN: 00252610)	(DIN: 02967081)
MANAGING DIRECTOR	DIRECTOR

Date : August 31, 2026
Place : Chennai