💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations grew 26.83% YoY, increasing from 2,008.80 in FY24 to 2,547.82 in FY25. Segment-specific growth was not disclosed.

Profitability Margins

Net profit margin compressed significantly from 26.57% in FY24 to 15.51% in FY25. This decline was primarily driven by a 79.37% increase in the cost of services, which outpaced revenue growth.

EBITDA Margin

EBITDA margin declined from 37.86% in FY24 to 25.34% in FY25, representing a compression of 1,252 basis points. Core profitability was impacted by the sharp rise in operational service costs.

Capital Expenditure

Depreciation and amortization increased by 193.5% YoY, from 39.92 in FY24 to 117.17 in FY25, indicating significant recent investment in fixed assets or studio infrastructure, likely funded by the 79.95 Cr IPO.

Credit Rating & Borrowing

Total borrowings as of March 31, 2025, stood at 13.03, comprising 10.74 in long-term borrowings and 2.29 in short-term borrowings. Specific credit ratings and interest rate percentages were not disclosed.

⚙️ Operational Drivers

Raw Materials

The primary operational cost is 'Cost of Service', which represents 61.92% of total revenue in FY25, up from 43.78% in FY24.

Capacity Expansion

The company raised 79.95 Cr through an IPO in October 2024 to fund objects approved by shareholders, which typically include studio expansion and technology upgrades in the VFX industry.

Raw Material Costs

Cost of services increased 79.37% YoY, from 879.48 in FY24 to 1,577.57 in FY25. This escalation is the primary factor behind the 25.98% decline in net profit despite higher revenues.

Manufacturing Efficiency

Not applicable for a VFX service provider; however, employee benefit expenses remained relatively stable, increasing only 9.98% YoY despite a 26.83% increase in revenue.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company intends to achieve growth by utilizing 79.95 Cr in IPO funds raised in October 2024. The strategy focuses on scaling VFX operations for studios and stakeholders, leveraging the growing demand for visual effects in India and international markets.

Products & Services

Visual Effects (VFX) services provided to film studios, production houses, and other stakeholders in the entertainment industry.

Brand Portfolio

Identical Brains Studios.

🌍 External Factors

Industry Trends

The VFX industry in India is experiencing a shift toward more robust IP rights regulation to safeguard creative works. The industry is evolving from a service-only model to one that emphasizes creative ownership and fair use standards.

Competitive Landscape

The company operates in the competitive VFX industry in India, competing with both domestic studios and international outsourcing firms.

Competitive Moat

The company's moat is built on its specialized VFX capabilities and its compliance with evolving IP regulations. However, the sustainability of this moat is challenged by rising operational costs and intense competition for talent.

Macro Economic Sensitivity

The company is sensitive to the overall growth of the media and entertainment industry and the regulatory environment surrounding Intellectual Property (IP) in India.

Consumer Behavior

Increased demand for high-quality visual content in cinema and streaming platforms is driving demand for the company's VFX services.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by IP rights regulations in India, which encompass creative safeguards and fair use standards for the VFX industry.

Taxation Policy Impact

The company follows the Income Tax Act, 1961, with an effective tax rate of approximately 25.2% in FY25 (Tax expense of 146.79 on PBT of 541.87).

Legal Contingencies

No pending court cases or material legal disputes with specific INR values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of service costs, which increased by 79.37% YoY, potentially impacting future net profit by 20-30% if the trend continues without corresponding revenue increases.

Third Party Dependencies

High dependency on third-party service providers or sub-contractors, as 'Cost of Service' is the largest expense item at 1,577.57.

Technology Obsolescence Risk

The VFX industry is subject to rapid technological shifts; the company's 193.5% increase in depreciation suggests a high rate of asset replacement to stay current.