I was facing the same problem, and the VLC player simply failed to display HINDI fonts. With all options being explained on web were of no help. And, then I started searching for new player, and I got this Media Player Classic [MPC - HomeCinema] which could display my hindi fonts perfectly fine... Just tweek the following settings, after downloading the MPC player.
- Open MPC Player, and Press O.
- Select Playback=>Output, and under the DirectShow Video section, select VMR9 (renderless).
Yep... you are ready to go...
And, yes, you can tweak the style of your subtitle as well from Subtitles => Default Style.