Thinking Hats Entertainment Solutions Ltd Management Discussions

FY 2026 represents the fiscal year 2025-26, from 1 April 2025 to 31 March 2026, and analogously for FY 2025 and previously such labelled years.

GLOBAL ECONOMY

The global economy is proving more resilient than anticipated despite persistent trade tensions and policy uncertainty, according to the World Banks latest Global Economic Prospects report. Global growth is projected to remain broadly steady over the next two years, easing to 2.6% in 2026 before rising to 2.7% in 2027, an upward revision from the June forecast. The resilience reflects better-than-expected growth especially in the United States, which accounts for about two-thirds of the upward revision to the forecast in 2026. Even so, if these forecasts hold, the 2020s are on track to be the weakest decade for global growth since the 1960s. The sluggish pace is widening the gap in living standards across the world, the report finds: at the end of 2025, nearly all advanced economies enjoyed per capita incomes exceeding their 2019 levels, but about one in four developing economies had lower per capita incomes.

In 2025, growth was supported by a surge in trade ahead of policy changes and swift readjustments in global supply chains. These boosts are expected to fade in 2026 as trade and domestic demand soften. However, the easing global financial conditions and fiscal expansion in several large economies should help cushion the slowdown, according to the report. Global inflation is projected to edge down to 2.6% in 2026, reflecting softer labor markets and lower energy prices. Growth is expected to pick up in 2027 as trade flows adjust and policy uncertainty diminishes.

In 2026, growth in developing economies is expected to slow to 4% from 4.2% in 2025 before edging up to 4.1% in 2027 as trade tensions ease, commodity prices stabilize, financial conditions improve, and investment flows strengthen. Growth is projected to be higher in low-income countries, reaching an average of 5.6% over 2026-27, buoyed by firming domestic demand, recovering exports, and moderating inflation. However, this will not be sufficient to narrow the income gap between developing and advanced economies.

Per capita income growth in developing economies is projected to be 3% in 2026—about a percentage point below its 2000-2019 average. At this pace, per capita income in developing economies is expected to be only 12% of the level in advanced economies.

More than half of developing economies now have at least one fiscal rule in place. These can include limits on fiscal deficits, public debt, government expenditures, or revenue collection. Developing economies that adopt fiscal rules typically see their budget balance improve by 1.4 percentage points of GDP after five years, once interest payments and the ups and downs of the business cycle are accounted for. Use of fiscal rules also increases by 9 percentage points the likelihood of a multi-year improvement in budget balances. However, the medium- and long-term benefits of fiscal rules depend heavily on the strength of institutions, the economic context in which the rules are introduced, and how the rules are designed, the report finds.

OVERVIEW OF THE INDIAN ECONOMY

Indias economic journey over the past few years has been marked by remarkable growth and a steady rise in its position on the global stage. After overtaking the United Kingdom (UK) to become the fifth largest economy in Q1 FY23, India has continued this upward trajectory to surpass Japan in June 2025 to become the fourth largest economy in the world. With a nominal Gross Domestic Product (GDP) of Rs. 3,31,03,000 crore (US$ 3.78 trillion), Indias growth reflects a combination of strong domestic demand and policy reforms positioning the country as a key destination for global capital.

Further, India is projected to reach a GDP of Rs. 4,26,45,000 crore (US$ 5 trillion) by 2027 and is on course to surpass Germany by 2028. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

"For India, 2026 will be the year of resilience in domestic demand, decisive reforms in fiscal, monetary, and labor policies, and recalibrations in trade policies"

Three of the biggest global risks for India in 2026 will come from:

US tariff policies and the conclusion of the India-US trade deal, which remains unpredictable.

Chinas slow recovery and its dominance in critical minerals, which India must monitor as it recalibrates its relationship with Beijing.

Geopolitical tensions in Central Asia that could disrupt commodity prices and key logistics routes, including the Red Sea corridor.

Domestically, the three biggest risks that need to be monitored are:

Poor transmission of policy rate cuts to credit growth. A resurgence of inflation as demand picks up fast (and core has been above 4% - Possible implications of lower tax revenues for fiscal consolidation this year.

MARKET OVERVIEW

Indias Real Gross Domestic Product (GDP) or GDP at Constant Prices stood at Rs. 47.89 lakh crore (US544.20billion)inQ1ofFY26,upfromRs.44.42lakhcrore(US544.20billion)inQ1ofFY26,upfromRs.44.42lakhcrore(US 504.77 billion) in Q1 FY25, registering a growth rate of 7.8%. Nominal GDP or GDP at Current Prices for the same period was estimated at Rs. 86.05 lakh crore (US977.84billion),comparedtoRs.79.08lakhcrore(US977.84billion),comparedtoRs.79.08lakhcrore(US 898.64 billion) in the corresponding quarter of the previous year, showing a growth rate of 8.8%.

As on October 14, 2025, India is home to 123 unicorns, with six new startups achieving unicorn status in 2025.

Indias current account recorded a deficit of Rs. 21,288 crore (US2.37billion)inQ1FY26(April-June),comparedtoRs.76,282crore(US2.37billion)inQ1FY26(April-June),comparedtoRs.76,282crore(US 8.6 billion) in the same period of FY25, according to the Reserve Bank of India (RBI). The improvement reflects a narrower merchandise trade gap and steady growth in service exports. Exports fared remarkably well during the pandemic and aided recovery when all other growth engines were losing steam in terms of their contribution to GDP. Going forward, the contribution of merchandise exports may waver as several of Indias trade partners witness an economic slowdown. According to Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles Mr. Piyush Goyal, Indian exports are expected to reach US$ 1 trillion by 2030.

INDIAS NEAR-TERM OUTLOOK

In its latest World Economic Outlook report, the IMF said Indias economy is now expected to grow by 7.3% in FY26, up 0.7 percentage points from its earlier estimate. The upgrade reflects better-than-expected growth in the third quarter and continued strength in the fourth quarter of the current fiscal year.

The International Monetary Fund (IMF) has raised its growth forecast for Indias economy in fiscal year 2026 by 0.7 percentage points to 7.3%, pointing to strong economic momentum. However, it expects growth to moderate to around 6.4% over the following two financial years as temporary cyclical factors ease.

The IMFs revised outlook follows an update by Indias National Statistics Office (NSO), which earlier this month raised its estimate for growth in the year ending March 31 to 7.4%. This was higher than the governments initial projection of 6.3% to 6.8%, reinforcing the view that the economy has performed better than expected.

INDIA: ENTERTAINMENT & MEDIA OUTLOOK 2024-28

Indias entertainment and media (E&M) sector is rapidly expanding, driven by its large millennial and Gen Z population of over 91 crore. The key enablers include 80 crore broadband subscriptions, 55 crore smartphone users, 78 crore internet users, rising per capita income, and the worlds cheapest data costs. Despite contributing less than 2% to the global E&M sector, India is the fastest-growing territory, supported by its expanding economy and technological infrastructure. Valued at INR 245k crore in 2023, the sector is projected to reach INR 345k crore by 2028, with a compound annual growth rate (CAGR) of 8.3%. Advertisement and connectivity is driving the growth in the sector. Mobile-first dominance in India is very significant, with Indians spending 82% of their time on E&M apps. Digital media, over the top (OTT), online gaming, animation and visual effects (VFX), live events and music are high-growth areas, with average CAGRs exceeding 15%. The Indian startup ecosystem and favourable government policies around foreign direct investment (FDI) further support domestic E&M growth.

Total entertainment and media (E&M) revenue saw another strong year in 2023, with global year-on-year growth of 5.0%.

Global E&M revenue is expected to witness a more muted growth at 4.6% CAGR over the next five years. Despite the headwinds from economic slowdown, a cost-of-living crisis unfolding in several countries and geopolitical uncertainties, 2023 was still a strong year for the global E&M sector. Revenues witnessed year-on-year growth of 5.5% between 2022 and 2023, and are predicted to increase from INR 13,891k crore in 2023 to INR 17,359k crore in 2028. Both the consumer and connectivity sectors saw an uptick in growth in 2023 compared to 2022, but a slowdown in advertising spend led to the E&M growth rate remaining stable. However, advertising remains the fastest-rising sub-sector of the E&M market. Advertising will extend its lead over the consumer category over the forecast period, driven predominantly by rapid growth in the internet advertising segment, which added INR 432k crore to its global revenue base in 2023 and is set to rise at a 9.5% compound annual growth rate (CAGR) until 2028.

MARKET DYNAMICS

2025, India has 2-2.5 million active digital creators influencing over Rs. 29,60,300 crore (US350billion)inannualconsumerspending,whichisprojectedtoexceedRs.84,58,000crore(US350billion)inannualconsumerspending,whichisprojectedtoexceedRs.84,58,000crore(US 1 trillion) by 2030.

In the Union budget of FY26-27 the Ministry of Information and broadcasting received Rs. 4,551.94 crore (US$ 515.07 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.

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 contributed approximately Rs. 10,300 crore (US1.24billion)in2024andisexpectedtoscaletoRs.14,700crore(US1.24billion)in2024andisexpectedtoscaletoRs.14,700crore(US 1.75 billion) by 2027.

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.

The Indian M&E sector grew to Rs. 2,78,500 crore (US30.08billion)in2025(a9.130.08billion)in2025(a9.1 30.91 billion), and at a ~5.8% CAGR to Rs. 3,30,000 crore (US 35.65 billion) by 2028. 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 US 13 billion in 2023 to US$ 17 billion by 2028.

In 2025, Digital Media market in India reached US$ 13.13 billion. It is expected to contribute ~38% to the overall advertising industry in India, on par with television.

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 (US4.25billion)byFY28.InFY26,JioStarplanstoinvestRs.33,000crore(US4.25billion)byFY28.InFY26,JioStarplanstoinvestRs.33,000crore(US 3.85 billion) in new content, a move aimed at transforming Indias media landscape with greater focus on Indian-language, localised entertainment and sports.

Digital subscription revenue is projected to grow by Rs. 8,500 crore (US1.02billion),driven by videoOTTsubscriptionsexpandingfrom143milliontoapproximately191millionhouseholds.Meanwhile,TVODrevenuesareexpectedtoincreasefromRs.500crore(US1.02billion),drivenbyvideoOTTsubscriptionsexpandingfrom143milliontoapproximately191millionhouseholds.Meanwhile,TVODrevenuesareexpectedtoincreasefromRs.500crore(US 0.06 billion) to Rs. 740 crore (US$ 0.09 billion), while audio OTT subscriptions are set to double, reaching 28-30 million users. Subscription services, which accounted for 90.5% of revenue in 2021, are projected to account for 95% of revenue by 2026.

The film industry delivered record results, with over 1,900 releases and 37 films crossing Rs. 100 crore (US$ 0.012 billion) at the box office, highlighting the growing scale and commercial success of theatrical content in India.

The AVGC sector is estimated to grow at ~9% to reach ~Rs. 3 lakh crore (US$ 43.93 billion) by 2024, stated Union Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles, Mr. Piyush Goyal.

Indian Over-The-Top (OTT) platforms have demonstrated significant growth in the global market, witnessing a 194% increase in revenue from international viewers over the last two years. Indias Direct-To-Home (DTH) Services market is expected to expand to US7.59billionin2029fromUS7.59billionin2029fromUS 6.48 billion in 2023, growing at a CAGR of 2.8%.

As per GroupMs TYNY report 2023, India was ranked 8th by global ad spend and will continue as the fastest-growing market among the top 10 ad markets in 2023. Key growth drivers included rising demand for content among users and affordable subscription packages.

The Indian music industry was valued at around Rs. 6,000 crore (US709.55million)inFY25andisestimatedtoreachRs.6,900crore(US709.55million)inFY25andisestimatedtoreachRs.6,900crore(US 780.76 million) in FY26, reflecting a year-on-year growth of 15.0%. It is projected to grow to Rs. 10,899 crore (US$ 1.3 billion) by FY28, translating into a CAGR of 22.0% from FY25 to FY28.

By 2025, the number of connected smart televisions is expected to reach ~40-50 million. 30% of the content viewed on these screens will be gaming, social media, short video, and content items produced exclusively for this audience by television, print and radio brands. By 2025, ~600-650 million Indians, will consume short-form videos, with active users spending up to 55 to 60 minutes per day.

Recent Developments in the Media and Entertainment Industry are:

As announced in the Union Budget FY27, AVGC Content Creator Labs (CCLs) are proposed to be set up in 15,000 secondary schools and 500 colleges across the country, with an allocated investment of Rs. 250 crore (US0.03billion).AmajorstrategicmoveincludestheRs.1,25,000crore(US0.03billion).AmajorstrategicmoveincludestheRs.1,25,000crore(US 15 billion) partnership between Bharti Airtel and Google (2026-2030) to develop an AI hub and digital infrastructure, significantly bolstering content delivery and data processing capabilities. In January 2026, Universal Music Group acquired a stake in Excel Entertainment for Rs. 747 crore (US0.09billion),strengtheningitspresenceinIndiasfilmandmusicecosystem.InFY26,JioStarplanstoinvestRs.33,000crore(US0.09billion),strengtheningitspresenceinIndiasfilmandmusicecosystem.InFY26,JioStarplanstoinvestRs.33,000crore(US 3.85 billion) in new content, a move aimed at transforming Indias media landscape with greater focus on Indian-language, localised entertainment and sports. FDI inflows in the information and broadcasting sector (including print media) stood at Rs. 82,201.29 crore (US$ 9.88 billion) between April 2000-December 2025. 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 (US7.13billion)inFY24.TheStar-Viacom18mergerdealsignedonFebruary28willcreateanUS7.13billion)inFY24.TheStar-Viacom18mergerdealsignedonFebruary28willcreateanUS 8.5 billion media goliath with a dominating presence in both TV and digital segments. Media company Shemaroo Entertainment is planning to spend Rs. 75 crore (US9.1million)inFY24tobolsteritsbroadcastandover-the-top(OTT)businesses.NewlymergedmultiplexgiantPVRInoxisreadywithaplantoaddupto175newscreensandretrofitahostofexistingonesataninvestmentofRs.700crore(US9.1million)inFY24tobolsteritsbroadcastandover-the-top(OTT)businesses.NewlymergedmultiplexgiantPVRInoxisreadywithaplantoaddupto175newscreensandretrofitahostofexistingonesataninvestmentofRs.700crore(US 85.1 million) during FY24.

Indian Media and Entertainment: New Era of Growth and Innovation

The Indian media and entertainment (M&E) industry is experiencing a transformative phase, driven by rapid digitization, evolving consumer preferences, and a surge in homegrown content. With advancements in technology, new formats of storytelling, and an increasing shift to digital platforms, the industry is poised to become one of the largest markets globally. Lets explore the emerging trends, growth drivers, and challenges shaping the future of Indias M&E landscape, along with key players worth watching.

The M&E sector revolves around becoming a global content powerhouse, leading in digital media, cinema, television, and animation. Here are the central pillars supporting the growth of this sector:

Digitization of Content: Increasing adoption of digital platforms and OTT services, focusing on delivering content anytime, anywhere. The shift from physical to digital, as seen in live event popularity and gaming, reflects Indias evolving consumer preferences, which continue to lean towards convenience and on-demand content.

Regional and Vernacular Growth: Expanding the reach of regional language content, catering to the diverse linguistic audience across the country.

Content Export Boom: Leveraging Indias storytelling prowess to export films, TV shows, and digital content to global markets.

Technological Innovation: Incorporating emerging technologies like Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) to enhance user experiences.

Regulation and Policy Support: Government initiatives to streamline content production and distribution, incentivize investments, and ensure intellectual property protection.

1.1. Television Overview: Television remains one of the most significant entertainment mediums in India, with a broad base of channels spanning entertainment, news, sports, and education. Trends: Growth of OTT platforms and integration with traditional TV services via smart TVs and set-top boxes.

1.2. Film Industry Overview: Bollywood and regional cinema have historically been the backbone of Indias M&E industry. India is one of the largest producers of films globally, with strong domestic and international demand. Trends: Surge in OTT platforms releasing straight-to-digital films, increased focus on high quality regional films, and content export to global markets.

1.3. OTT Platforms and Digital Media Overview: The rise of Over-The-Top (OTT) services like Netflix, and Amazon Prime Video, and homegrown services such as Hotstar, ZEE5, and ALTBalaji has revolutionized content consumption in India. Trends: With affordable mobile data, digital streaming services have penetrated rural and urban markets, driven by regional and vernacular content demand.

1.4. Print and Publishing Overview: While digital news is on the rise, traditional print media still enjoys a vast readership, particularly in regional languages. Trends: The transition from print to digital publishing and integration of multimedia storytelling techniques to attract digital-native audiences.

1.5. Animation and Visual Effects (VFX)Overview: Indias animation and VFX industry is fast becoming a global hub for outsourcing and original production. Trends: Growing demand for animated content for OTT platforms and films, alongside a rise in gamification, e-sports, and VFX-heavy film productions.

Types of Markets in the M&E Industry

2.1. Digital and OTT MarketScope: The digital segment has witnessed exponential growth, with more consumers turning to on-demand content across OTT platforms, YouTube, and other digital media. Growth Drivers: Affordable data plans, increasing smartphone penetration, and demand for original, localized content. Challenges: Intense competition among platforms, content saturation, and regulatory compliance.

2.2. Television Market

Scope: Television remains a staple of Indian households, especially with the advent of smart TVs and enhanced DTH services. Growth Drivers: Strong rural and tier-2 city viewership, live sports events, and reality TV shows. Challenges: Shift to digital platforms and fragmented audience viewing behavior.

2.3. Film Industry Market2.3. Film Industry Market- Scope: Cinema has been a cultural mainstay in India, though the pandemic accelerated the transition to digital-first film releases.- Growth Drivers: Regional language cinema, OTT-first film releases, and international collaborations.- Challenges: Piracy, declining theater footfall, and high production costs.

2.4. Advertising Market2.4. Advertising Market- Scope: Advertising revenue from TV, digital media, and social platforms forms a significant chunk of the industrys earnings.- Growth Drivers: Programmatic advertising, influencer marketing, and native ads.- Challenges: Privacy regulations, ad-blocking technology, and consumer preference for ad-free content experiences.

India Event and Exhibition Market Analysis

India Event and Exhibition Market Analysis

The India event and exhibition market size was valued at USD 5.69 billion in 2025 and estimated to grow from USD 6.15 billion in 2026 to reach USD 9.04 billion by 2031, at a CAGR of 8.05% during the forecast period (2026-2031). Capacity additions at venues such as Bharat Mandapam and Jio World Convention Centre, government incentives under the "Meet in India" program, and a corporate pivot toward experiential marketing reinforce the markets growth runway. International organizers view India as a cost-competitive gateway to South Asia, while domestic operators benefit from rising discretionary spending and an expanding base of small and medium exhibitors. Hybrid formats are broadening audience reach, although physical shows remain the revenue backbone because they support tactile product demonstrations and face-to-face deal-making. Demand for net-zero venues is accelerating, aligning with multinational ESG mandates and further differentiating newly built facilities.

Market Size in USD Billion USD 9.04 BCAGR 8.05%USD 6.15 BUSD 5.69 B 2025 2026 2031India Event and Exhibition Market Market Size in USD Billion Source: Mordor Intelligence

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.

OPPORTUNITIES AND THREATS

Opportunities:

Expanding to scale up the content volume with new age media such as YouTube, music streaming app and similar- Expanding into tech enabled events and retail visual Merchandising solutions- Forming strategic partnerships with streaming platform and other content providers to increase exposure and access to new markets- Expanding into international markets, where there may be higher demand for certain types of content

Threats:

Intense competition from large players.- Rapidly evolving technology, which requires continuous investment to stay competitive.- Changes in consumer preferences or trends, which can impact demand for specific types of event and digital contents.- Regulatory changes or legal challenges, which can impact the ability to distribute content or access certain markets.

COMPANY OVERVIEW

Thinking Hats Entertainment Solutions Limited is an integrated entertainment and experiential marketing company with over a decade of experience in delivering creative event management, content production and retail visual merchandising solutions. Since its incorporation, the Company has built a diversified portfolio spanning corporate events, experiential marketing, digital content and entertainment production, catering to clients across multiple industries.

In 2019, the Company expanded into OTT content production, strengthening its presence in the media and entertainment sector through the creation of web series, films and other digital content.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains adequate internal financial controls, supported by an in-house finance team and periodic third-party audits. All financial transactions are recorded with transparency and accuracy, supported by an ERP-based system.

1 is based on five main components:

Risk assessment Control environment Control activities Information and communication Monitoring at all organisational levels

Internal audit operates autonomously to review the completeness and accuracy of records, processes and performance relative to predetermined objectives. It acts as a value-added function for the Board in its concentration on:

Effectiveness and efficiency of operations Safeguarding company assets Internal and external reporting reliability Compliance with legislation, regulation and internal policy

Internal audit drives change through delivery of fact-based information and practical recommendations. These activities are monitored at the Board-level Audit Committee to ensure transparency and accountability. Throughout the year, focus was given to independent decision-making, recording process weaknesses, and taking corrective action. Regular reviews are carried out by an external Chartered Accountant firm under defined policies and procedures. Important audit findings are reported to management and the Audit Committee directly.

HUMAN RESOURCES

Our employees are our core resource and the Company has continuously evolved policies to strengthen its employee value proposition. Your Company was able to attract and retain best talent in the market and the same can be felt in the past growth of the Company. The Company is constantly working on providing the best working environment to its Human Resources with a view to inculcate leadership, autonomy and towards this objective; your company spends large efforts on training. Your Company shall always place all necessary emphasis on continuous development of its Human Resources. The belief "great people create great organization" has been at the core of the Companys approach to its people.

As on 31st March, 2026, our Company has 35 employees on payroll.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis report detailing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand supply conditions, raw material prices, finished goods prices, cyclical demand and pricing in the Companys products and their principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries with which the Company conducts business and other factors such as litigation and / or labor negotiations.