THESL - Thinking

📊 NSE: THESL 🏢 Entertainment / Electronic Media Software 📅 Last Updated: 12/14/2025 14:21

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 79% YoY to INR 4,766.80 Lakhs. Segment performance: Event Management grew to INR 3,375.00 Lakhs (70.8% of revenue), Retail Visual Merchandising grew to INR 1,369.26 Lakhs (28.7% of revenue), and Film, Music and Content Development contributed INR 22.50 Lakhs (0.5% of revenue).

Profitability Margins

Net Profit Margin declined from 11.57% in FY24 to 7.57% in FY25. Profit After Tax grew 18.5% YoY to INR 366.50 Lakhs, while Profit Before Tax grew 21.5% YoY to INR 522.92 Lakhs.

EBITDA Margin

EBITDA was INR 522.92 Lakhs in FY25, representing an EBITDA margin of 10.97%, compared to INR 499.58 Lakhs in FY24.

Capital Expenditure

Intangible Assets under Development, primarily related to content production, increased from INR 1,481.40 Lakhs in March 2025 to INR 2,019.52 Lakhs by September 2025, representing a 36.3% increase in six months.

Credit Rating & Borrowing

The company proactively manages borrowing through forward booking and vendor development. Debt-equity ratio improved from 2.18x in FY24 to 1.68x in FY25. Interest coverage ratio improved from 7.19x to 9.7x.

⚙️ Operational Drivers

Raw Materials

Cost of materials consumed and services received represents 75.6% of total revenue (INR 3,602.74 Lakhs). Specific commodity names are not disclosed as the company is service-oriented.

Capacity Expansion

The company had 35 employees on payroll as of March 31, 2025. Expansion is focused on the OTT content space, which the company entered in 2019.

Raw Material Costs

Cost of materials and services received was INR 3,602.74 Lakhs in FY25. Procurement strategies include proactive vendor development and forward booking to manage price fluctuations.

Manufacturing Efficiency

Not applicable for this service-based business; however, debtors turnover improved from 2.8x to 4x, indicating higher operational efficiency in collections.

📈 Strategic Growth

Growth Strategy

Growth is driven by expansion into the OTT content space (ventured in 2019) and multi-season series production. The company is also expanding into new client verticals and geographies while offering bundled creative and digital services to increase retention.

Products & Services

Event management services, retail visual merchandising displays, and OTT content production (films, music, and series).

Brand Portfolio

Thinking Hats Entertainment Solutions.

New Products/Services

Production of OTT content and multi-season series, which the company ventured into in 2019 to capitalize on the growing digital space.

Market Expansion

Expansion into new client verticals and geographies to mitigate client concentration risk.

Strategic Alliances

The company utilizes co-production models in the OTT segment to reduce risk exposure and align with platform guidelines.

🌍 External Factors

Industry Trends

The OTT content production industry is growing, but faces increasing regulatory oversight on digital content and high dependency on streaming platform approvals.

Competitive Landscape

The company competes in the event management, retail merchandising, and content production sectors, focusing on service diversity to navigate downturns.

Competitive Moat

Moat is built on creative expertise and management experience in the OTT space since 2019, supported by a collaborative work culture and incentive-based talent retention.

Macro Economic Sensitivity

Sensitivity to inflation and recession which may affect the discretionary marketing budgets of clients in the events and retail sectors.

Consumer Behavior

Shift toward digital and OTT content consumption is a primary driver for the company's content production division.

Geopolitical Risks

Geopolitical instability may affect client marketing budgets, particularly in discretionary spending categories.

⚖️ Regulatory & Governance

Industry Regulations

Subject to growing regulatory oversight on digital content and streaming platform guidelines in the OTT segment.

Taxation Policy Impact

The company's effective tax rate for FY25 was approximately 29.9%, with total tax expenses of INR 156.42 Lakhs on a PBT of INR 522.92 Lakhs.

Legal Contingencies

No strictures or penalties were imposed by SEBI, Stock Exchanges, or any Statutory Authority for non-compliance related to capital markets during the period.

⚠️ Risk Analysis

Key Uncertainties

Client concentration risk (high revenue dependency on few large clients) and execution risk (live nature of events and tight delivery timelines) could lead to financial loss or reputational damage.