Basilic Fly Studio Limited — Investor Meet, 21-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** Basilic Fly Studio Limited reported a turnover of ₹75.48 crore for the half-year period, reflecting a gradual post-strike recovery within the industry. Excluding the impact of the recent acquisition of One of Us, revenue decreased to ₹39.8 crore, down from ₹49.6 crore in the prior year, indicating a year-over-year dip of ₹15.7 crore largely driven by industry-wide slowdowns. The EBITDA for H1 FY25 stood at ₹18.68 crore, with a profit before tax (PBT) of ₹15.76 crore compared to ₹23.3 crore in H1 FY24. The net profit (PAT) was reported at ₹12.33 crore versus ₹18.9 crore in the same half last year.

2. **Future Outlook and Growth Drivers:** Management expressed optimism for H2 FY25, projecting revenue to potentially double from H1, aiming for around ₹100 crore, supported by a strong project pipeline and strategic acquisitions. The recent acquisition of One of Us is expected to enhance service capabilities and market position by integrating operations and relocating artists to India, optimizing costs.

3. **Order Book and Operational Updates:** The company holds a significant order book, particularly from One of Us, which includes approximately £20 million in upcoming projects. Basilic aims to execute 30% to 35% of this work within India. There are major projects flowing in from Amazon and Netflix set to commence in the coming months.

4. **Analyst Q&A Insights:**

- **Revenue and Profitability:** Analysts sought clarity on forward-looking revenue expectations; management confirmed a significant projected rebound for H2.

- **Market Position and Competitive Landscape:** Concerns were raised about competitive threats in the visual effects (VFX) market and the impact of strategic shifts post-acquisition.

- **Operational Challenges or Risks:** The management addressed delays in receivables, attributed to ongoing industry impacts from previous strikes, with assurances of active collections strategies.

- **Capex and Capital Allocation:** Analysts queried about capital allocation and the anticipated integration costs from the acquisition, with management confirming strategies to optimize costs post-restructuring.

- **Strategic Priorities and Long-Term Vision:** The discussion emphasized the push for innovation and adjustments in operations, particularly leveraging AI technologies to enhance efficiency.

5. **Market or Regulatory Updates:** No significant market or regulatory updates were discussed that might influence strategic directions or operational capabilities.

6. **Strategic Focus Areas:** The management is prioritizing growth through strategic acquisitions, operational efficiency, innovation, and leveraging tax incentives to enhance margins and attract new projects, indicated by a confident management tone.

7. **Investor Insight:** Financial health reflects a cautious yet strategic recovery path, leveraging acquisitions to bolster growth. With projected positive revenue trajectories but mixed current margins, a 'buy' position appears justifiable subject to ongoing control over costs and receivables management, alongside successful execution of integration plans.