Totally agree, It’s quite surprising to see that despite the impressive numbers, the company hasn’t been able to attract any big shark or bring in significant institutional inflow. It seems like the promoter is more interested in marketing the company to artificially boost share prices, or building his own brand which he can later use in politics.

Any update on Q2 FY24 result and business outlook

Thanks for this new page. Have you done any comparison with Phantom digital who is in the same domain? How does 2 companies stands in terms of their value proposition, future growth prospects, financial track record, valuation and management quality?

Attended the concall and got the opportunity to ask few questions that were troubling me.

1. Regarding Neodymium supply – since China has restricted exports of critical minerals, the company doesn’t have any supply concerns as we have tie up with ARCI for supplies and even the govt wants pvt companies to participate in utilisation of these.

2. On Tesla entry into India, the management is positive on getting share of business. Didn’t quantify, nor did I ask.

3. Due to aerospace and drone boom the company is positive on demand scenario and they mentioned that their components were onboard Chandrayan and Aditya L1.

4. E-waste Recycling doesn’t pose any threat to their revenue potential and would in turn improve the availability of supplies to the company.

Other point of interest –

The new business investment is 4 Cr and revenue forecast in FY 25 is 7lin the range of 7 to 15 Cr.
Since the metals involved are in the range of Rs 5000/Kg, once the business takes off, the revenue potential can be huge.

Missed parts of the concall so others can contribute.

Basilic Fly Studio Ltd. Market cap: 644cr

Business overview:

Established in 2016, Basilic Fly Studio (BFS), is a leading visual effects (VFX) studio headquartered in Chennai, India with subsidiaries operating in Canada and UK.
BFS specializes in creating captivating visual experiences and has gained rich experience in pushing the boundaries of creativity and technology to deliver exceptional VFX solutions for movies, TV shows, web series, and commercials.
Renowned for its high-quality output and commitment to investing in the latest technology, BFS has become a top name in the VFX industry. Its team of skilled artists has earned a reputation for excellence, serving clients from diverse sectors and countries. The company’s work spans across various platforms and end-uses, ensuring that every detail is meticulously crafted.

Vision and Mission:

Services:

Growth Strategy:

Total Addressable Market:
According to Boston Consulting Group (BCG) and the Confederation of Indian Industries (CII) research, the Indian animation and visual effects industry has the potential to grab 20 to 25% of the worldwide AVGC market ,it is estimated to generate 75,000-120,000 jobs by that year.

In India, the animation sector alone was valued at INR 2,450 crore ($330 Mn) in 2020. A significant proportion of revenues (70-75%) for this sector in India came from international clients, further demonstrating the growth potential of the global VFX industry.

The Animation and VFX industry in India has the potential for further expansion, as these technologies have gained prominence in various fields, including gaming, education, branding, and marketing. The use of animation and VFX in these sectors has contributed significantly to the growth of the industry in India.
Financial and ratios:

Investment Rationale:

1. Sunrise industry with huge TAM compared to company revenue/market cap.
2. Top notch clients like, apple, netflix, sony, fox, warner brothers etc.
3. Considering to start work for Indian films, OTT, Commercials etc.
4. High ROE and ROCE.
5. Revenue guidance of 60% with margin of 45%.
6. Long runway of growth.
7. Company working on Kids entertainment, which can have long episodes of 40/45, which provide stability to earnings.
8. Work on entire value chain. Company can provide services for gaming, education videos, Anime ( my son mostly watch Anime) it is a cult in young people.
9. I see this company similar to KDDL, RACL gear tech which are in precision work and supply to top notch clients in world.

Catalyst:

1. Plan to increase manpower from current 500 to 800/1000 in next year.
2. Two new facility in India and two new in Europe+ south korea planned.
3. Strike in US for writers have been ended will resume movie/OTT which are halt or due.
4. Expansion from IPO money, no need debt as of now.
5. Training people to be Generalist who can do many task.
6. Automation/copy cat tool to reduce man hours.
7. added VFX supervisor/manager in team.

Technical:

1. Company listed recently and is under consolidation, stage 1.
2. Pivot point at 345 rs.
3. For this IPO to get 66cr, 14,000 + Cr subscription was seen with more then 7 lakh application. It was gung ho.

Risk:

1. High Growers, can become slow grower without notice.
2. Execution risk.
3. Inherent risks related to entertainment industry.
4. Competition.
5. Micro cap.
6. Top 5 customers are 59% revenue in FY23, which is reduced from previous years.

Presentation: https://nsearchives.nseindia.com/corporate/BASILIC_09112023183725_IntimationunderRegulation30InvestorPresentation.pdf
Conference call:
https://www.basilicflystudio.com/investor-corner/#bfs-h1-fy24-investors-analysts-concall-audio-recording

I request here members to bring industry specific and company specific insights to understand company/industry better.

Disclosure: Invested and looking to add based on opportunity.