Cyber Media Research & Services Ltd Management Discussions

Investors are hereby informed that statements in this Management Discussion & Analysis describing the objectives, projections, estimates and expectations of Cyber Media Research & Services Limited ("CMRSL"/"the Company") may be ‘forward-looking statements within the meaning of applicable laws and regulations. The following discussions and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

This MDA covers the overall business of Cyber Media Research & Services Limited including its subsidiary. The financial figures are provided for the consolidated business of the group. If stand-alone numbers are considered, they are highlighted as such.

Industry Overview & Digital Ad Market Size in 2024

This chapter has been extracted/ derived from the "Dentsu-e4m Digital Report 2024"

In the year 2023, the India economy continued to enjoy steady growth posting 7% as per the RBI. A key driver of this remains an aggressive transition towards a digital economy. The new digital economy is revolutionising the Indian advertising industry as well. At present, digital advertising industry stood at a market size of Rs. 40,685, growing at 36.6% over 2022 and is forecasted to reach Rs. 50,857 crore, with a growth rate of 25% by end of 2024.

Digital ad industry has firmly moved into the pole position with market share of 44% of the overall ad market, overtaking TV ad spends (32% of market share). The digital media spends are expected to reach 50% of overall market share in 2024.

In 2024, pace of spends is expected to be slower at an overall growth rate of 9%. However, in comparison to 2023 growth of 36.6%, 2024 may be slower at 25%. Despite this digital media advertising will continue to be the primary driving force for the industry. Since 2016 the digital marketing industry has grown at 29.1%.

Digital Ad Market Size in 2024

Key growth drivers would remain eCommerce, rapidly growing fintech ecosystem, gaming, healthtech and edtech. The pie of digital marketing is primarily contributed to by social media marketing (30%), online videos (28%), and paid search (23%). Connected TV while at a small base is likely to aggressively increase its market share over the next 5 years.

A major trend underlining paid marketing is a continued transition to programmatically buying ads across above segments. This has become 45% of all digital spends and continues to steadily increase. AI adtech solutions will continue to empower programmatic buying across inventory types.

Digital media spends across industry verticals

The FMCG segment makes the biggest contribution of 36% (Rs 14,755 crore) and has grown 29% over the previous year. The majority of the FMCG categorys digital media budget is spent on online video (44%), followed by social media (25%). This is followed by e-commerce category contributing 19% (Rs 7,865 crore) that has grown at 31% over the previous year. The e-commerce segment spends 52% of its digital media budget on paid search and 18% on social media.

Other major industry verticals were pharmaceuticals spending Rs. 2,027 crores, automotive at Rs. 1,815 crores, consumer durables at Rs. 1,775 crores, telecom at Rs. 1,549 crores and BFSI at Rs. 1,479 crores.

(Source - Dentsu-e4m Digital Report 2024)

CMRSLs Business

CMRSL had its best annual performance in the history of the company generating higher revenue as well as profits compared to any year in the past. This shows confident steps by the company in the right direction both strategically as well as in terms of on-ground execution.

Importantly, performance across each of CMRSLs business units was positive. Our team managed to steadily add new customers which contributed to steady revenue as well as profitability growth. This was reflected by the fact that the performance in the first 3 quarters of FY 2023-24 was similar to results of entire FY 2022-23.

Furthermore, CMRSL retained a high percentage of customers in a advertising and programmatic space, while increasing a share of wallet in many cases. The company also maintained positive cashflow throughout the financial year.

The above highlights points to the good health of the company, that is creating value for its customers across multiple revenue streams.

With a well defined product roadmap and excellence in services, CMRSL is firmly on a path towards long-term growth. The management expects to continue growing the team and the business not only in India, but across International markets as well in FY 2024-25.

Despite, some uncertainty in the global geo-political and economic situation, digital marketing is expected to continue to evolve and grow. Therefore, it is crucial that CMRSL increase its adaptability and continues to integrate new technologies - particularly with respect to AI workflows. Therefore, CMRSL will look to continue investing in technology as well as expand its team.

It is relevant to note that AI will have significant impact on the marketing industry. New technology platforms such as OpenAIs ChatGPT and Googles Gemini will bring fast technological changes, automation, simplification and data-centric decision making. CMRSL is already taking steps and aims to be an AI native Company. This will help CMRSL create competitiveness at a global scale.

The long-term prospects for CMRSL continue to remain healthy based on strategic bets being made by the Company in new areas of growth.

Media Buying Agency - A New Approach

CMRSLs demand side efforts were focused on performance marketing and programmatic media buying. The company has merged these business units to be able to deliver higher value proposition to its customers. This strategically will allow CMRSL to increase its outreach as well as vie for larger budgets across its customers in FY2024-25.

Independently both advertiser and programmatic advertiser business have grown in FY 2023-24. Our team has ably worked towards enabling customer success and serviced clients with the expertise necessary to drive marketing returns. Our media buying and performance marketing services continue to provide data driven ROI to advertisers. These campaigns involve campaign management, app installs, advisory services, creative services, social media planning, and social media execution.

The continued investment towards CMGalaxy is also enabling a data and technology oriented approach, making CMRSL among the few technology driven marketing agencies in India. CMGalaxy is a market intelligence tool that allows advertisers to map their entire marketing funnel across multiple paid marketing channels. This enables advertisers to harness their data and make intelligent decisions to derive most out of their marketing. By leveraging AI/ML the platform is able to significantly improve marketing outputs.

CyberMedia Research (CMR) - CMRSLs Marketing Research & Data Analytics Business

CMR offers premier research and consulting firm offering customers strategic and tactical insights. The Companys research and advisory services operates with premium data across technology, telecom, life sciences, automotive, manufacturing, and other industry verticals. Key offerings include building more market trackers, custom data and custom dashboards for clients. The Team provides data-as-a- service by empowering its customers with ability to collect, process, visualize and effectively deliver insights from large data sets.

Key sectoral focus includes:

• Technology Market Intelligence & Analytics: CMR provides in-depth market research and analysis, giving clients a clear understanding of technology trends, market trends, competitor landscape, and customer behaviour.

• CMRs Expertise in Emerging Technologies and Consumer Trends: CMR is the preferred partner for clients in unlocking key insights on emerging technologies, including Generative AI and AI, Cloud, and Data Centers, amongst others, and consumer technology trends, including smartphones and smart devices, and others.

• Go-to-Market Services: CMR assist clients in launching and scaling their businesses in India. This includes developing effective go- to-market strategies specific to the Indian market, building channel partnerships, and establishing a strong local presence

• Market Advisory: CMRs team of experts offers strategic guidance on market entry, expansion plans, and product positioning, ensuring clients make informed decisions.

• Custom Consulting: CMRs bouquet of consulting services address specific client needs.

CMR was among the strongest performing business units in FY 2023-24, successfully adding enterprise clients such as Cisco, Samsung, IBM, TTSL, among others.

Publisher Monetization - Improving Quality of Inventory

The Publisher Monetization Team continues to aid publishers in monetizing their ad inventory. This is done in partnership with major global adtech players including Google, Pubmatic, Magnite, among others. The Company is a Google Publishing Partner on GAM360, AdSense and AdX products which gives it the added advantage of being able to operate a world-class ad tech stack.

The publisher team has successfully worked towards protecting its publishers against ad fraud and operates high quality inventory on which premium ad campaigns are delivered. Auxo Ads platform allows publishers to optimize revenues across demand partners and manage their traffic more effectively.

The Publisher business has experienced a steady performance in FY 2023-24 and focused on successfully adding quality inventory to its network. Increased competition in this sector requires an investment in creating new technology for clients. The Company expects steady growth in the Publisher revenue stream while it looks to add improved product offering in the current financial year.

Opportunities and Threats

Opportunities

Segments that are up-and-coming and expected to fuel growth in the coming years include programmatic media buying, connectTV, digital out-of-home, and Web3 technologies.

The AI Opportunity

Artificial intelligence based on large-language models will create substantial shifts across the advertising industry. Being a digital marketing organization that has its own technology stack, the Company sees this as a necessary space of investment and growth. Brands are likely to adopt and require large set of AI driven marketing solutions.

CMRSL through CMGalaxy and Auxo Ads will rapidly look to enter this space and fill this need across ecosystem stakeholders. This initiative will further strengthen the offering to attract more international clients as well.

Expand our Current Business Relationships

CMRSLs goal is to build long-term, sustainable business relationships with our customers to generate increasing revenues. The Company will expand the scope and range of services provided to our existing customers by continuing to build expertise and extending capabilities into new and emerging marketing technologies. In addition, the Company intends to continue to invest towards building more powerful martech and ad-tech solutions. In addition, the Company intends to continue to build relationships with various global companies as business partners which can provide us with better benefit by introducing local clients.

Optimal Utilization of Resources & Establishing Better Processes

The Company constantly endeavours to improve its technical process, and will increase service activities to optimize the utilization of resources. For FY 2023-24, developments include deployment of HRMS SaaS for all Cyberites, deployment of internal finance platform that automates multiple functions, roll-out of OKRs to track better productivity across teams, usage of Jira project management tool to track technology development, more effective cashflow management systems, among other steps towards good governance.

CMRSL has developed effective internal systems, and intends to continue to establish processes to ensure effective management control and team betterment.

Attract, develop and retain highly-skilled employees

CMRSL employees are one of its most important assets. The Company focuses on the quality and level of performance that our employees deliver by investing in recruitment, training, retention practices, maintenance of a culture of innovation. The Company also creates a balance between a challenging and rewarding work environment. CMRSLs talent development strategy focusses on engaging, motivating and developing a high performing workforce and aim to create and sustain a positive workplace culture for the employees. The Company also has a competency training framework, seamlessly integrated into our business that has been designed for new employees to be "project-ready".

Threats

The increasing spread of fake and bad quality content has emerged as a major concern for social media. Further, with dynamic technological innovations taking place, the media sector is facing considerable uncertainty.

While AI is an opportunity, it is also a threat. The Company is committed to investing in AI, however the pace of change in this area demands continued investment in products for the long-term.

Furthermore, as we to foray ahead, we anticipate increased competition in the digital domain from other businesses trying to emulate us, as well as from several niche enterprises in the digital media, social media, and other online services, with whom we are competing, using our expertise and brand position in the market as a single-stop shop.

The company is continuously monitoring the various threats which can hamper growth and is taking appropriate and effective steps in this regard.

Operating segment-wise performance

The highlights of segment wise overall performance on consolidated basis are as under:

(Rs. in Lakhs)

Particulars	Digital Services
	2023-24	2022-23
Income	8,808.93	6,317.68
Expenses	8,237.91	5,987.88
Earnings before interest, tax, depreciation and amortization (EBITDA)	679.77	439.58

Business Outlook

CMRSLs business streams have all enjoyed a year of growth and expansion. This is an indicator for strong long-term growth of the Company. Through better internal processes our teams have increased the customer base while in parallel increasing the share of wallet from its existing clients as well.

The Company is continuing to add technology-based revenues in addition to the services it provides, and through this transition expects to continue improving its profitability. Our steps towards creating global alliances with adtech and martech partners will further allow our products to expand in international markets. Through an expanded scope and range of services the Company will continue to foray in to new and emerging markets as well.

The Company constantly endeavours to improve its technical process, and will increase service activities to optimize the utilization of resources, and bring cost optimizations. By investing in AI we are taking focused steps towards becoming an AI native company in a progressive manner.

Risks and Concerns

The Company has established a risk management framework to identify and mitigate risks arising from external and internal factors. A risk identification exercise is carried out periodically to identify various strategic, operational, financial and compliance-related risks.

Few risks and uncertainties that can affect the business include the inherent risk of cybercrimes and data breach that may impact reputation, exposure to litigations and competition from emerging digital platforms and other social media apps.

Potential risks are reviewed on an ongoing basis and mitigating controls are deliberated upon as an integral part of decision-making. To stay ahead of the competition and minimize exposure to risk, the Company has taken various initiatives like continuous engagement with the editorial team and upgradation of editorial processes to ensure factual accuracy of content published, greater focus on reaching newer segments and geographies. Further, to monitor status of statutory compliances across all locations/ functions helps the Company to minimize its exposure to any non-compliance to statutory and legal requirements.

Further, the Company is continuously evaluating the evolving situation and taking necessary steps to mitigate its impact, while ensuring business continuity. The Company is also taking cost optimization efforts across businesses and functions.

Information Security

The Company accords great importance to the security of its information assets. To ensure that this gets desired focus and attention, Information Officer is entrusted with the task of ensuring that your Company has the requisite security posture.

Internal Control Systems and their Adequacy

CMRSL has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Company has adopted the internal control integrated framework which is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness.

CMRSLs internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. CMRSL has a well-defined delegation of power with authority limits for approving contracts as well as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down. CMRSL uses a state-of-the-art enterprise resource planning system that connects all parts of the organization, to record data for accounting, consolidation and management information purposes. It has continued its efforts to align all its processes and controls with best practices.

CMRSL management assessed the effectiveness of the companys internal control over financial reporting (as defined in Regulation 17 of the Listing Regulations as of March 31,2024).

M/s. Goel Minrti & Associates, the statutory auditors of CMRSL have audited the financial statements included in this annual report and have issued an attestation report on the companys internal control over financial reporting (as defined in section 143 of Companies Act, 2013).

CMRSL has appointed M/s. R R R S & Associates, Chartered Accountants to oversee and carry out internal audit of its activities. In line with best practice, the conduct of internal audit is oriented towards the review of internal controls and risks in the companys operations such as service delivery, accounting and finance, procurement, employee engagement, statutory compliances.

The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets CMRSLs statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically.

Based on its evaluation (as defined in section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations), CMRSLs audit committee has concluded that, as of March 31, 2024, the companys internal financial controls were adequate and operating effectively.

Financial performance

The discussions in this section relate to the consolidated financial results pertaining to the year that ended March 31,2024. The financial statements of Cyber Media Research & Services Limited and its subsidiary (collectively referred to as ‘CMRSL or ‘the Company) are prepared in accordance with the Indian Accounting Standards (referred to as ‘Ind AS) prescribed under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the consolidated financial statements.

The following table gives an overview of the consolidated financial results of the company:

(Rs. in Lakhs)

Particulars	2024			2023
	Revenue	% of Revenue	% Growth	Revenue	% of Revenue
Revenue from operations	8,732.77	100	38.34	6,312.63	100
Earnings before interest, tax, depreciation and amortization (EBITDA)	679.77	7.78	54.64	439.58	6.96
Profit before tax (PBT)	493.32	5.65	49.58	329.80	5.22
Profit after tax (PAT)	358.69	4.11	69.33	211.83	3.36
Earnings per share (in Rs.)	12.25	-	-	7.79	-

Analysis of revenue growth

On a reported basis, CMRSLs revenue grew by a strong 38.34% in FY 2024, as compared to 11.48% in FY 2023. This performance by the Company was higher than the estimate guidance of 30% growth shared for FY 2023-24.

Importantly, the EBITDA grew by 54.64% in FY 2023-24 showing a commitment towards higher profitability by the Company.

Key financial ratios

Key financial ratios on consolidated basis are given as under:

Particulars	Unit	2023-24	2022-23
Profitability Ratios
PBITD / Total Income	%	6.83	6.96
PBIT / Total Income	%	6.52	6.53
PBT / Total Income	%	5.60	5.22
PAT / Total Income	%	4.07	3.35
Return on Capital Employed	%	25.69	21.28
Financial Ratios
Return on Networth	Times	0.23	0.17
Net Debt / Equity	Times	0.55	0.54
Debtors Turnover	Days	79.55	66.80
Current Ratio	Times	1.66	1.58
Interest Coverage	Times	7.10	5.00

Human Resources

The Companys culture and reputation as a leader in digital technologies, adtech, data analytics, and next-generation technologies (including AI) enable us to attract and retain high quality talent. The competency development of our employees continues to be a key area of strategic focus for us. The management is keen to continuously improve hiring practices, and improve the quality of the team across all functions. Furthermore, the Company has an increasing focus on internal training, external upskilling and team building activities that help maintain a culture of camaraderie, innovation and motivation within the organization.

The Company invested in building tighter control systems improving processes and operational efficiencies as a result. By establishing smooth WFH processes and remote collaboration, our operation teams are able to ensure that client service level agreements are met and project milestones delivered on time.

This continual pursuit has led to high retention rates among employees. Your company believes and recognises the employees as asset of the Company. The overall attrition rate of employees of the Company was 20.51 percent at March 31,2024.

In order to ensure smooth functioning, maintain employees overall data in one place, viz. attendance, leave records, declarations, leave and WFH approval process etc., the Company maintains ‘Zimyo application. During the year, the Company has explored the requisitions of new hirings and appraisals of employees through ‘Zimyo application.

The Company believes and maintain the diversity of employees and in order to support the women, during the year, the women employees percentage was 37.18 percent.

The Company will continue to connect with all stakeholders on a regular basis, communicate in an open and transparent manner that yield desired results. The total number of employees in the Company as on March 31,2024 were 78.

Sexual Harassment Policy

The Company is committed to creating and maintaining an atmosphere in which employees can work together, without fear of sexual harassment, exploitation or intimidation. Every employee is made aware that the Company is strongly opposed to sexual harassment and that such behaviour is prohibited both by law and by CMRSL. Your Company has formed an Internal Committee pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaints were received by the Company during the year under review. There was no pending complaint at the opening and closing of the financial year under review.

Cautionary Statement

Some of the statements in this management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downtrend in industry, significant changes in political and economic environment in India and abroad, tax laws, import duties, litigation and labour relations.