DIGIKORE - Digikore Studios

📊 NSE: DIGIKORE 🏢 Entertainment / Electronic Media Software 📅 Last Updated: 12/13/2025 21:34

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew by 59.6% YoY to INR 36.13 Cr in H1 FY26 from INR 22.62 Cr in H1 FY25. Branded content is expected to contribute INR 10-12 Cr for the full year, while VFX remains the core driver. Revenue from high-margin verticals like AI SaaS and virtual production is currently growing but not yet a dominant percentage of the total mix.

Geographic Revenue Split

The company has a significant international presence through its Canadian subsidiary, Digikore Visual Effects Inc, which reported a turnover of INR 11.26 Cr (approximately 31% of consolidated H1 FY26 revenue). The company is actively pushing sales in the U.S. and Europe to diversify its client base.

Profitability Margins

Net Profit Margin improved to 16.91% in H1 FY26 from 12.48% in H1 FY25, a gain of 443 bps. This was driven by a reduction in operating expenses as a percentage of revenue, which fell from 83% to 78.6%, reflecting better utilization and cost control.

EBITDA Margin

EBITDA Margin stood at 34.87% in H1 FY26, up significantly from 26.07% in H1 FY25, representing an 880 bps improvement. Absolute EBITDA grew 113.5% YoY to INR 12.60 Cr from INR 5.90 Cr.

Capital Expenditure

The company has planned a Qualified Institutional Placement (QIP) of INR 45 Cr to accelerate growth. Additionally, promoters intend to infuse INR 20 Cr via convertible warrants to align capital structure with future expansion needs.

Credit Rating & Borrowing

The company has not issued any debt instruments, making credit rating requirements not applicable. Interest costs for H1 FY26 were INR 2.59 Cr, up from INR 0.95 Cr in H1 FY25, reflecting increased utilization of working capital facilities.

⚙️ Operational Drivers

Raw Materials

As a service-based VFX studio, the primary 'raw materials' are human capital and technology. Employee costs represent 23.2% of total revenue (INR 8.39 Cr), and technical subcontractor costs represent 8.9% (INR 3.23 Cr).

Import Sources

Not applicable as the company provides digital services; however, it utilizes top-tier licensed software and proprietary AI tools developed internally.

Key Suppliers

Not disclosed, but the company relies on major software providers for VFX production and cloud infrastructure for its SaaS platforms.

Capacity Expansion

Current workforce stands at 350+ team members. Expansion is focused on digital capacity through AI-assisted workflows and virtual production assets on platforms like fab.com to scale without linear headcount growth.

Raw Material Costs

Technical subcontractor costs increased to INR 3.23 Cr in H1 FY26 from INR 2.65 Cr in H1 FY25, but decreased as a percentage of revenue, indicating better internal project management.

Manufacturing Efficiency

Efficiency is measured by operating expense reduction (down 440 bps) and the transition to positive operating cash flow in H1 FY26 due to better collection cycles.

Logistics & Distribution

Distribution is digital; the company delivers VFX assets and branded content via secure cloud protocols to global studios and platforms like JioHotstar.

📈 Strategic Growth

Expected Growth Rate

59.60%

Growth Strategy

Growth will be achieved through a four-pronged strategy: scaling the core VFX business in US/Europe, monetizing virtual production assets on fab.com, expanding the 'Kaise Banta Hai' branded content series (targeting INR 10-12 Cr revenue), and launching proprietary AI SaaS platforms to automate labor-intensive VFX tasks.

Products & Services

Visual Effects (VFX) for films and web series, Virtual Production services, Branded Content (e.g., 'Kaise Banta Hai'), Brand Jingles, and AI-assisted SaaS tools for roto and match-move.

Brand Portfolio

Digikore Studios, Kaise Banta Hai (Branded Content).

New Products/Services

AI SaaS platform for automated VFX workflows and virtual production asset monetization, expected to drive higher margins as they scale beyond the current labor-intensive model.

Market Expansion

Aggressive sales push in the U.S. and Europe to capitalize on the post-strike rebound in content production and the structural shift toward streaming and multi-season episodics.

Market Share & Ranking

Positioned as a leading VFX studio in India with a 25-year history in media and 15+ years in VFX, specifically targeting the SME listing milestone achieved in October 2023.

Strategic Alliances

The company works with major global studios and has a 100% owned subsidiary in Canada to facilitate North American operations.

🌍 External Factors

Industry Trends

The industry is shifting toward Virtual Production (LED volumes) and AI integration. The market for virtual production is expected to grow as it reduces the need for real-world shoots, a trend Digikore is positioning for by developing digital assets.

Competitive Landscape

Competes with global VFX houses and other Indian studios; differentiates through its aggressive adoption of AI and integrated branded content vertical.

Competitive Moat

Moat is built on a 15-year track record with Hollywood studios and proprietary AI tools that reduce unit costs. This is sustainable because it creates a high barrier to entry for new players who lack the historical data and client trust required for major film projects.

Macro Economic Sensitivity

Highly sensitive to the global content production cycle; the 9-month industry strike in 2024 significantly impacted the sector, though Digikore used the period to sharpen its cost line.

Consumer Behavior

Shift toward streaming and multi-season episodic content increases the volume of VFX work required per project compared to traditional feature films.

Geopolitical Risks

Trade barriers in the media industry are low, but the company must comply with international labor and intellectual property regulations across India and Canada.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with the Companies Act, 2013 and SEBI (LODR) Regulations. The Secretarial Audit for FY25 confirmed adherence to applicable statutory provisions.

Environmental Compliance

NIL ESG compliance costs reported as the company does not operate manufacturing facilities.

Taxation Policy Impact

The company provided for taxation in its subsidiary and reported a consolidated tax expense (including deferred tax) of INR 1.62 Cr for H1 FY26, representing an effective tax rate of approximately 21% on PBT.

Legal Contingencies

No pending material court cases or labor disputes were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

AI disruption is the primary risk, with the potential to automate 30-50% of traditional VFX tasks. The company is mitigating this by owning the AI tools rather than just using them.

Geographic Concentration Risk

High concentration of revenue from North American and European clients, making the company vulnerable to regional economic downturns or industry strikes in those markets.