Digikore Studios Limited — Q4 FY26

Digikore Studios Limited Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=DFpo9geyXSQ

0:02 2 seconds Ladies and gentlemen, good day and welcome to the H2FY26 results conference call of Digiscore Digore Studios Limited 0:11 11 seconds hosted by Korean Advisor Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you 0:20 20 seconds to ask questions after the presentation concludes. 0:24 24 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:32 32 seconds I now hand the conference over to Miss Saki Panchara from Kirin Advisers. Thank you and over to you ma'am. 0:42 42 seconds Thank you. On behalf of Kin Advisor, I welcome you all to the H2FI26 conference call studios limited. So management 0:50 50 seconds team, we have Mr. Avis more managing director and chief executive officer Miss Hi Kahuja CE company secretary and 0:58 58 seconds compliance officer. Now I hand over the call to Mr. Mo for opening remarks. Over to you sir. 1:05 1 minute, 5 seconds Thank you and uh good afternoon everyone and thank you for joining us today for 1:11 1 minute, 11 seconds digo studios limited fy 256 call. I want to begin by thanking our shareholders, 1:18 1 minute, 18 seconds analysts, partners and well-wishers for your continued support and encouragement. 1:25 1 minute, 25 seconds The last year demanded patience and belief not just from our team but from every stakeholder who stood with digor and we do not take this trust lightly. 1:36 1 minute, 36 seconds So thank you once again for trusting in us and uh staying with us. 1:41 1 minute, 41 seconds Today's call is a special one because FI2526 represents something very important for digore. A decent turnaround and an inflection point. 1:53 1 minute, 53 seconds We move from an industrywide disruption phase to a growth phase. Sharper, stronger and more future ready. Under 2:02 2 minutes, 2 seconds project Abimmanu, we focused on disciplined execution, tighter financial management and building a more 2:10 2 minutes, 10 seconds resilient, scalable business while staying transparent and compliant with the market. 2:16 2 minutes, 16 seconds Let me start with the industrial context. The Hollywood writers and actors tried to create an unprecedented pause. 2:24 2 minutes, 24 seconds That period was painful for the entire global entertainment supply chain. 2:28 2 minutes, 28 seconds Studios, streamers, production houses and every vendor in post-prouction and VFX. Well, but the rearview mirror is 2:35 2 minutes, 35 seconds behind us now. What matters is the windshield. Productions have restarted with the boom. Green lights are back. 2:43 2 minutes, 43 seconds Content slits are being rebuilt across geography. Independent market study continue to project strong growth for 2:50 2 minutes, 50 seconds the global VFX and animation sector over the next five years driven by the ongoing expansion of streaming content, 2:58 2 minutes, 58 seconds the scale of episodic production and the increasing use of VFX across German. In 3:05 3 minutes, 5 seconds simple word, the demand environment is improving and the industry is entering a strong cycle. 3:12 3 minutes, 12 seconds So I've been straightforward the industry is not just recovering it is expanding and dig is positioned to grow 3:19 3 minutes, 19 seconds within that. Now for the core dig performance in FI2526 3:26 3 minutes, 26 seconds like I mentioned FI 2526 was a strong turnaround year for digital studio backed by the disciplined execution framework for project money. A 3:35 3 minutes, 35 seconds consolidated result reflects sharp revenue growth, a repel to profitability, meaningful margin expansion, and balance sheet strengthening. 3:44 3 minutes, 44 seconds Some key highlights for FI2526 versus FI 2425. 3:50 3 minutes, 50 seconds Revenue from operations grew 83.1% year on year up to 66.02 crores. 3:58 3 minutes, 58 seconds Total revenue grew 91.5% yearon year up to 70.86 crores. 4:06 4 minutes, 6 seconds EBT moved from loss of 9.61 crores to a profit of 15.37 crores. PAX reversed 4:15 4 minutes, 15 seconds from a loss of 7.2 crores to a profit tax profit after tax of 12.64 crores and 4:22 4 minutes, 22 seconds the net worth of the company is up 37.1% year-onear to 47.68 crores. 4:29 4 minutes, 29 seconds A key operating highlight is that while total revenue grew sharply, our expenses did not rise at the same pace reflecting 4:36 4 minutes, 36 seconds strong operating leverage and financial discipline. 4:40 4 minutes, 40 seconds The message is clear. We did not just recover. We recovered with efficiency. 4:46 4 minutes, 46 seconds And we believe this is not one-off. It's the early impact of a structured program that was designed to strengthen 4:52 4 minutes, 52 seconds financial resilience, improve cash flow quality, enhance execution discipline and rebuild stakeholder confidence. 5:02 5 minutes, 2 seconds Let me quickly explain the why in simple terms. 5:06 5 minutes, 6 seconds First, demand returned. As production restarted, we converted pipeline into delivery. Especially in episodic 5:13 5 minutes, 13 seconds episodic work gives repeat volumes, better planning and steadier execution. 5:19 5 minutes, 19 seconds Take for example a project called one piece which we delivered last year. So we delivered season two of one piece last year which was approximately a 5:26 5 minutes, 26 seconds $800,000 US project and uh we've been now approached by the one piece team again for season 3 of one piece which 5:34 5 minutes, 34 seconds for which the work will be starting in uh by uh by June. So this is great. So when you get onto a large 10fpole project every year literally as the new 5:43 5 minutes, 43 seconds seasons come out we keep getting work on that. So that builds the pipeline of the company in the long term. Second we sharpen execution. 5:52 5 minutes, 52 seconds So we moved a lot towards discipline tight delivery tighter cost lines better productivity and stronger financial 5:59 5 minutes, 59 seconds management. And third we invested ahead of the curve. We leaned into international business development, 6:06 6 minutes, 6 seconds client relationships and future ready capabilities like AI and virtual production workflows. 6:13 6 minutes, 13 seconds We also achieved a major milestone in terms of securing a TPN gold star status which matters a lot in the industry 6:22 6 minutes, 22 seconds because this adds a very high level of trust with clients. So we are now among one uh we are now one among only three 6:31 6 minutes, 31 seconds VFX studios worldwide with the PTN gold star status and the only listed VFX company in India to reach this elite 6:38 6 minutes, 38 seconds tier in the context content supply chain security credibility is not optional. It 6:45 6 minutes, 45 seconds is a gatekeeper. Many top tier studios and OTT projects require vendors to meet minimum security standards even to be eligible to quote. 6:55 6 minutes, 55 seconds This credential expands our eligibility pool and strengthens our ability to win larger longer tenure mandates. 7:03 7 minutes, 3 seconds So for digode, TPM gold star status is on a badge. It is a business advantage. 7:08 7 minutes, 8 seconds On similar lines, we achieved Amazon tier zero status which again very few studios in the world has and that you know uh gives us the advantage of coding 7:17 7 minutes, 17 seconds for certain Amazon projects which are uh clear only for tier zero security. 7:24 7 minutes, 24 seconds Now as we move forward, geographic expansion is the next pillar. Europe is a priority for us and we have also been deliberate about opening up Latin 7:33 7 minutes, 33 seconds America as a new growth lane. A strategic partnership with EFT Studios is a key step. EF is one of Europe and 7:41 7 minutes, 41 seconds Latin America's largest end-to-end production support houses operating across Spain, Mexico, Colombia, and the United States. This partnership is not 7:50 7 minutes, 50 seconds about one-off projects. It is about early access. It brings dig into the pipeline earlier during pre-production 7:57 7 minutes, 57 seconds and budgeting improving conversion probability, repeat workflows and long-term plan stickiness. 8:04 8 minutes, 4 seconds So based on expected project in the project flow and discussion management estimates EFV linked opportunity could 8:11 8 minutes, 11 seconds generate 50 to 50 crores of VFX revenue over the next three years. 8:16 8 minutes, 16 seconds So this is how we are building predictable growth, structured access, repeat pipelines and disciplined execution. 8:24 8 minutes, 24 seconds Now let's talk about the engine that feeds all of this which is business development. We have been exceptionally active on the business development side. 8:32 8 minutes, 32 seconds Over the last 12 months, we've completed over 250 in-person and online meeting across US, Europe, Asia, and Latin 8:40 8 minutes, 40 seconds America. building visibility with network streamer and production houses and supporting a higher quality pipeline 8:47 8 minutes, 47 seconds in episodic work. We are keeping that cad more meetings more demos moving because facetime with decision makers converts. 8:57 8 minutes, 57 seconds We also moved operationally to support this growth. We have been scaling our team capacity in line with demand so we can take on larger and longer decision 9:04 9 minutes, 4 seconds projects without compromising quality or timelines. 9:09 9 minutes, 9 seconds Now AI readiness is one of the very key things that we believe that we are among the four allies in India. So now I want to address the most important future 9:17 9 minutes, 17 seconds forward lever AI and content production transformation. 9:21 9 minutes, 21 seconds There is a real question in the market will AI impact VFX revenues and our answer is AI will change workflows but 9:28 9 minutes, 28 seconds it will also create new markets and we intend to lead that curve not change it. 9:35 9 minutes, 35 seconds We have invested in AI assisted roto cleanup, match, move, tracking and QC and in building proprietary workflows that improve speed and productivity. 9:46 9 minutes, 46 seconds But more importantly, we are extending AI from support tool to content creation engine. So this is where Kingdom Games, 9:53 9 minutes, 53 seconds our AI assisted movie IP becomes a gamecher. 9:58 9 minutes, 58 seconds Digital Studios is producing Kingdom Games, an AI assisted CG animated feature being developed from global 10:05 10 minutes, 5 seconds release. Our powerful and simple. What we did is we disrupted the traditional 10:12 10 minutes, 12 seconds CG production pipeline and we got AI into that and I do believe that we are among the first few studios in the world 10:20 10 minutes, 20 seconds to have achieved that. Any of you have not seen the Kingdom Games trailer, please do Google Digo Studios Kingdom Games and have a look at the trailer. It 10:28 10 minutes, 28 seconds is truly exceptional. I've personally had meetings with several distributors across the world and they do believe 10:35 10 minutes, 35 seconds it's it's it's incredible that a company in India can create Disney level animation at 120th of the cost of 10:43 10 minutes, 43 seconds regular animation. That's the disruption we've created with this film. So lower cost turns content into a potential 10:50 10 minutes, 50 seconds money spinner across multiple revenue streams because the break even point drops dramatically and monetization becomes far more attractive. 11:00 11 minutes And we are not thinking just about one revenue line, one revenue line. For Kingdom games, the monetization plan is multi-name. We have SW which is 11:08 11 minutes, 8 seconds streaming video on demand. A watt which is advertising video and demand, TW transactional video on demand, airlines, music and more. We are in talks with 11:17 11 minutes, 17 seconds distributors who will be getting our films uh to release theatrically in several countries as well as across sod 11:26 11 minutes, 26 seconds award airlines and music distribution across the world. We would actually end up being one of India's first global IP 11:34 11 minutes, 34 seconds where people from over 100 countries will watch games in several languages. 11:40 11 minutes, 40 seconds We've already partnered with several international companies for distribution and monetization and we believe this can create long-term recurring revenue 11:47 11 minutes, 47 seconds potential for digor across multiple sources. 11:51 11 minutes, 51 seconds While we were reaching out to people for monetization of TV games, we accidentally delivered a great new revenue opportunity for our branded 11:59 11 minutes, 59 seconds content shows which are already monetized and we've already made profits on them as an example where we already have 20 episodes close 12:08 12 minutes, 8 seconds to 20 episodes on air on Jio Cinema Jar and the next season of 10 episodes will be streaming by the end of May. Now the 12:16 12 minutes, 16 seconds other opportunity that we've actually opened up is putting all these 30 episodes English version on over 200 12:23 12 minutes, 23 seconds advertising video on demand platforms all over the world which would generate revenue for the company for years and years. So apart from just the revenue we 12:32 12 minutes, 32 seconds generated in you know by producing this content from the brands now we have large scale revenue and long-term revenue that we generate through these 12:40 12 minutes, 40 seconds awar platforms which we'll be you know putting accessible 30 episodes on. 12:46 12 minutes, 46 seconds That's a massive breakthrough that we've seen recently. 12:49 12 minutes, 49 seconds So AI assisted production economics creating new model for scalable IT creation and dig is building that model now with several global IPs lined up over the next 24 months. 13:00 13 minutes Before I close, let me highlight a few additional credibility anchors. Our approvals and client trust create a 13:08 13 minutes, 8 seconds durable mode. Digore continues to be a trusted vendor to major studios and streamers, helping us qualify faster and win larger mandates. 13:18 13 minutes, 18 seconds Project AdMano is not a one-time action. 13:21 13 minutes, 21 seconds It is a structured governance-led program focused on capital structure, cash flow quality, execution readiness, 13:29 13 minutes, 29 seconds and stakeholder confidence. Our promoterled actions and balance sheet strengthening initiatives are designed to improve financial flexibility at the right point in the industry cycle. 13:40 13 minutes, 40 seconds Closing with three simple takeaways. 13:43 13 minutes, 43 seconds Number one, FI25246 was a turnaround without we strong revenue grow to profitability, expanded margins and spread. 13:56 13 minutes, 56 seconds Number two, the industrial cycle for the next seen strong commissioning activity again and the next level are expected to be 14:04 14 minutes, 4 seconds busy for VFX companies globally. And number three, Digor is building a future ready global platform. We are 14:12 14 minutes, 12 seconds strengthening t trust through TP and goldstar, expanding into Europe and Latin America through partnerships like EFT and preparing for an AI shaped 14:22 14 minutes, 22 seconds future with AI assisted content production at there's a quote which I would like to conclude with the best way to predict 14:30 14 minutes, 30 seconds the future is to create it and that is what we are doing through strategy discipline and execution. 14:37 14 minutes, 37 seconds Last on behalf of the leadership team, thank you again for your trust in Digital Studios. We are excited about the road ahead and we look forward to 14:45 14 minutes, 45 seconds updating you as we scale global VFX, expand into new markets and build a new generation content engine that I open the floor to questions now. Thank you. 14:57 14 minutes, 57 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 15:06 15 minutes, 6 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 15:16 15 minutes, 16 seconds Ladies and gentlemen, we will wait for a moment while the question cube assembles. 15:28 15 minutes, 28 seconds The first question is from Vinod Sha from VS Ventures. Please go ahead. 15:34 15 minutes, 34 seconds Yeah. Hi, good evening sir. Am I audible? Yes sir, you are. 15:39 15 minutes, 39 seconds Okay sir. Uh so congrats on good set of numbers. So the revenue growth was 83%. 15:46 15 minutes, 46 seconds Uh so how much of it came from the new clients or existing clients? 15:52 15 minutes, 52 seconds So there's been a mix of new and existing. Obviously you know we haven't broken down currently uh you know just before it's called what is new and what is existing. So when you say new 16:01 16 minutes, 1 second obviously you know one of that was the big uh one piece project which we did which is around you know $800,000 US then we then we worked with HDO on prem. 16:11 16 minutes, 11 seconds So one very good sign is that you know we brought in a lot of high value direct projects in the mix but honestly if you ask me right now you know of the break 16:19 16 minutes, 19 seconds up of that what is the group answer also and I don't have an answer to that immediately. 16:23 16 minutes, 23 seconds Okay no problem and what is the revenue split between uh Bollywood and Indian OTT or TV content uh per 16:32 16 minutes, 32 seconds do VFS in India but uh out of this the branded content revenue is around 9. 16:42 16 minutes, 42 seconds BS and who are like our top three clients and uh what's their percentage to the 16:50 16 minutes, 50 seconds sorry you know I can't release uh publicly client names but uh three clients would contribute around maybe 16:58 16 minutes, 58 seconds 30% of our revenue for sure and what's the current order book current order book is fantastic because 17:06 17 minutes, 6 seconds we already have uh you know uh rings of power going on with Amazon which is a massive project. We have one piece 17:15 17 minutes, 15 seconds season 3 coming up. Uh we've gotten from our existing outsource vendors commitments of close to you know for for the rest of the year because we take 17:23 17 minutes, 23 seconds details from them on uh manpower planning we've got almost 40 crores worth of commitments from our existing outsource clients. So if if you ask me 17:31 17 minutes, 31 seconds today we are sitting on close to you know 45 crores or 50 crores of orders which obviously includes around 40 cr protection from our existing outsource 17:39 17 minutes, 39 seconds clients. So uh you know as we work during the year we'll add more direct clients uh direct projects and new clients for outsource as well. 17:50 17 minutes, 50 seconds Okay sir and sir any like major production which is upcoming or which we have delivered recently. So can some of 17:58 17 minutes, 58 seconds you new project that's coming up for us is one piece season 3 which we estimate would be in the $1 million range uh a single project and uh we have several 18:07 18 minutes, 7 seconds more projects that we are talking already with ESG in South America. In fact as we speak our head of business development is in South America doing a 18:16 18 minutes, 16 seconds lot of meetings out there. So and being updated on a daily basis. We're already bidding out there for several high value projects uh thanks to EF who's a major 18:25 18 minutes, 25 seconds player in the South American market. So we're going to look at quite a bit of traction from South America this year towards our revenue which was literally 18:32 18 minutes, 32 seconds zero till last year and this year we expect South America to contribute uh from PC. 18:41 18 minutes, 41 seconds Okay. Uh thank you. So that's all. Uh I will join back to Q. Sure. Thank you. 18:48 18 minutes, 48 seconds Thank you ladies and gentlemen. A reminder to all you may press star one on the thruststone telephone to ask any 18:55 18 minutes, 55 seconds questions. We have next question from Dhanyani as an individual investor. Please go ahead. 19:05 19 minutes, 5 seconds Hello. Yes. 19:09 19 minutes, 9 seconds Okay. Uh so hello sir. Um I'm audible now. 19:16 19 minutes, 16 seconds Yes. Yes, absolutely. Okay. 19:30 19 minutes, 30 seconds dealt to answer your question. You know that 19:43 19 minutes, 43 seconds because of the strike the cash has dried up so much in the industry. 19:51 19 minutes, 51 seconds A to get inside is very difficult. Bgin. 20:04 20 minutes, 4 seconds And that's exactly the state of the VX. 20:20 20 minutes, 20 seconds started in end of February in within two months the government announced again you know top up only benefits for 20:27 20 minutes, 27 seconds companies because they realize the cash flows are getting affected within two months of the happening I'm sure you heard the news where companies can take 20:35 20 minutes, 35 seconds an additional 10% uh additional funding top off from the government which is security backed by the government 20:47 20 minutes, 47 seconds has been in trouble with no government support with no additional cash from the government all the companies within the industry are managing themselves only. 20:57 20 minutes, 57 seconds If India as a as a country is announcing you know uh financial support I can understand 21:04 21 minutes, 4 seconds but last year 401 days in the future might be same. 21:16 21 minutes, 16 seconds So do you estimate the cash flow situation to you know become regularized in the next 6 to 12 months 21:24 21 minutes, 24 seconds because project so another 6 to 12 months because demand 21:35 21 minutes, 35 seconds is starting on a great note but cash flow to regularize 6 to 12 months very easily yes it's I don't see that as a 21:44 21 minutes, 44 seconds problem for us I see that as a thing that we have to plan for and uh we are already doing that because we know that uh the work is back and the good sign is 21:52 21 minutes, 52 seconds the work is back which was a problem till last year. Now as the work is back the cash flow will come back. 21:58 21 minutes, 58 seconds Okay. So second question 22:22 22 minutes, 22 seconds is natural for trade receivables to Increase 22:36 22 minutes, 36 seconds cash flow because it is receivable. Because the 22:45 22 minutes, 45 seconds because of the client the payments have yet to come from the clients revenue 22:53 22 minutes, 53 seconds after 90 to 120 days and some clients are taking even 180 days now 23:01 23 minutes, 1 second for payments but now also clients some clients are taking up to 180 days for payments. So obviously 100%. 23:13 23 minutes, 13 seconds Okay. So and operating from profit margin 23:19 23 minutes, 19 seconds 27% next year 23:28 23 minutes, 28 seconds margin 30% 32% but one thing that could change everything which I I have no idea right 23:36 23 minutes, 36 seconds now because it is our first project that is our AI assisted movie Kingdom games you're almost ready for ready by end of 23:44 23 minutes, 44 seconds June. We are talking to several potential distributors all over the world and uh you know across various 23:51 23 minutes, 51 seconds platforms like I said theatrical in USA uh and all your aw platforms what 23:58 23 minutes, 58 seconds platform. So if that movie gets good buyers across the world, it could change our operating margin substantially 24:05 24 minutes, 5 seconds because already there is no more cost. Now whatever comes in from King James will 24:13 24 minutes, 13 seconds be pure revenue. So that could substantially change but I cannot put a number to that right now because we haven't uh you know actively started 24:22 24 minutes, 22 seconds receiving offers from people. We will only start receiving offers from people once the film is ready which is the end of June. 24:28 24 minutes, 28 seconds Okay. So we don't know that. So it's not right 24:38 24 minutes, 38 seconds for me to put a number because it's not you know I can say 24:45 24 minutes, 45 seconds the the variance here is so much that if as an example I'll give you an example we doing we are talking to a lot of people for a theatrical release in the US. 24:55 24 minutes, 55 seconds The electrical release in US means that itself will give the company 10 to 15 crores of revenue net revenue just by 25:03 25 minutes, 3 seconds getting that release in the US which is a massive you know uh opportunity for any Indian company 25:11 25 minutes, 11 seconds the rel 30 cr as a possible revenue from Indian games for the company 25:20 25 minutes, 20 seconds that can be between 5 to 7 but uh so that's why it's very difficult to put a number to that 25:29 25 minutes, 29 seconds But as a business owner maybe can generate this kind of OPM 25:38 25 minutes, 38 seconds regular operating operating margins will remain in VFX where they are right now 25:46 25 minutes, 46 seconds there's going to be no drastic change in the VFX side of the business. 25:49 25 minutes, 49 seconds Okay. And last question we are taking active steps towards improving productivity in the company. 25:59 25 minutes, 59 seconds So our goal is to improve that by 3% in this year. So it's not a drastic change 40 50 but even a two or 3% change. It's 26:09 26 minutes, 9 seconds not it leads to substantial revenue because suddenly on if you're targeting let's say you know if if you're able to achieve hypothetically 100 cr next year 26:17 26 minutes, 17 seconds and you're doing a two or 3% with group operating margin that that's a substantial contribution to the bottom line. 26:24 26 minutes, 24 seconds Okay fine. So last question promoter holdings promoters holding why the promoters are placed the 26:31 26 minutes, 31 seconds holdings last we had a loss banks don't fund unfortunately banks whole of last year 26:40 26 minutes, 40 seconds banks did not fund the company or we were unable to pick up loans from banks because of a lossmaking balance sheet so we had to go to NBFC and everybody needs 26:49 26 minutes, 49 seconds security you know nobody comes without You know you also know that you know lot more than that. 26:59 26 minutes, 59 seconds So the only security available with the company technically is the shares of the company. So they so since the cash flows 27:06 27 minutes, 6 seconds were affected and the company needed to borrow funds the banks were not giving funds because of a loss balance sheet. 27:12 27 minutes, 12 seconds Now obviously the banks they've already already approached us but last year the challenge that we 27:21 27 minutes, 21 seconds faced was uh we were not able to get fund from banks and the only option with NBS was to provide some security and the 27:29 27 minutes, 29 seconds only security we had was our shares. So that is why promoter had to pledge shares uh for uh borrowing funds. 27:36 27 minutes, 36 seconds Okay. And when we are planning for uncurch so we are so you know we've been actively working on a QIP which which is 27:44 27 minutes, 44 seconds also known I've discussed that in several calls looking for we planning for a 35 Q we were very close to doing it and then Mr. Trump launch this play spoil sport by you know the market. 27:57 27 minutes, 57 seconds We estimate in the next in this year at 10 we will successfully complete a Q or a preferential of 30 to 25 crores and uh 28:05 28 minutes, 5 seconds obviously that will free up all our uh shares. 28:09 28 minutes, 9 seconds Okay. So on this year we might be seeing of holding right might be. 28:14 28 minutes, 14 seconds So this year again so sorry you know you are also from the market you understand that you know investors today are not 28:21 28 minutes, 21 seconds you know you see IPOs also half of them are going you know on a very low subscription. So the markets have to improve for a company to successfully 28:30 28 minutes, 30 seconds carry out a QIP or a fund raise. It's it's normal. 28:33 28 minutes, 33 seconds Okay. We are focused as the market improves in the next two to three months and we are able to you know complete our Q before as the markets improve we 28:40 28 minutes, 40 seconds definitely complete our so that is also depending now on how the markets are no 28:48 28 minutes, 48 seconds question holdings holding unpledged is completely right now depending on the fundra Right. 29:12 29 minutes, 12 seconds So as we as of today we are very confident that our fund raise should get completed in this year. We are pretty 29:20 29 minutes, 20 seconds confident of that and that is why I can say that there's a good chance better chance of the shares getting unpledged. 29:28 29 minutes, 28 seconds Okay. And last callusonus plan 29:44 29 minutes, 44 seconds for qualifying for main board there are certain criteria right and uh one is the data capital of the company. So we we 29:53 29 minutes, 53 seconds did issue one bonus uh one is to one bonus last year. This it depends on there are two three factors that is the 30:02 30 minutes, 2 seconds QIP is a factor uh you know the the the future listing on main board is a factor. So if that if that does become a 30:10 30 minutes, 10 seconds criteria to meet our uh you know paid up capital requirements we will definitely issue but uh I can't commit that right 30:17 30 minutes, 17 seconds now because I had not discussed that with the board and unless I have board approval I cannot publicly commit that. 30:24 30 minutes, 24 seconds Okay fine. Thank you so much and I'm little bit unsatisfied but it's fine. No problem. Thank you sir. 30:32 30 minutes, 32 seconds Okay. 30:33 30 minutes, 33 seconds And if anything and I would like to ask why are you unsatisfied? What is the reason? Uh pardon. 30:40 30 minutes, 40 seconds What makes you feel unsatisfied just for my information? Uh see unc. 30:55 30 minutes, 55 seconds So as a business owner, everyone knows 31:07 31 minutes, 7 seconds was an unplanned so that is why so that is why that is 31:18 31 minutes, 18 seconds you misunderstood what I said that is why you feel you're unsatisfied business which is our bread and butter 31:25 31 minutes, 25 seconds and contributes maximum uh towards our business going to remain steady with two or 3% 31:33 31 minutes, 33 seconds better than we are doing taking activities for uh improving productivity right so that I answered your question 31:40 31 minutes, 40 seconds what I give what I want to ask you just for my knowledge 31:49 31 minutes, 49 seconds oh you're into let's assume you launched a new venture a new business only all together 31:57 31 minutes, 57 seconds no I'm actually I'm planning I'm planning so see I don't like the clients much more so I have a two or three clients in my 32:06 32 minutes, 6 seconds portfolio So I'm in a know I'm making good kind of money. So I'm satisfied with that. That's why I'm not planning for the vantage capital because I get the offers a little bit more in the past but I'm good at my home. 32:17 32 minutes, 17 seconds Let's park the discussion or the potential revenue from kingdom gaming aside. So if I would just answer your question in one line on the OPM I would 32:26 32 minutes, 26 seconds like to say that we are making an effort to improve our OPM by 2 to 3% this year by helping by productivity improvement 32:33 32 minutes, 33 seconds across the production of VFX. So you can if you want to consider that as an answer which is which is which is the fact you should consider that which is that will satisfy you. 32:44 32 minutes, 44 seconds Okay fine. Okay. Thank you so much. Thank you. Thank you sir. 32:50 32 minutes, 50 seconds The next question is from Pandi as an individual investor. Please go ahead. Yeah. Am I audible? 32:59 32 minutes, 59 seconds Yes sir. Yeah I'm sorry. Your name? My name is Adash Pandi. other country. Yes, obviously. 33:07 33 minutes, 7 seconds Yeah. So, um I I had a couple of questions. One on the overall sort of um guidance for next year in terms of revenue and profits and the second 33:16 33 minutes, 16 seconds question is on um you know the other businesses outside of BFX. Uh what are the kind of traction that we're seeing in those like the virtual production uh 33:26 33 minutes, 26 seconds own content and some of those other business lines that we have? What kind of traction are we seeing there? 33:32 33 minutes, 32 seconds Sure. So uh for for next year you know we have we are looking at a guidance of uh obviously on the business wise around 33:40 33 minutes, 40 seconds 85 crores all uh revenue top line I'm pretty sure we'll beat that but that's the guidance we we working on with the 33:47 33 minutes, 47 seconds uh outside world on the pack level we looking at around a 15 to 16 pack that is our internal 33:54 33 minutes, 54 seconds target that we set for us right now on the businesses VFX is growing obviously it goes without saying that VFX 34:02 34 minutes, 2 seconds Then that's why I say we'll beat our guidance of last year because uh last year we had really only when we gave the 34:08 34 minutes, 8 seconds guidance for 2627 there was no uh you know uh we did not we did not account for the AI film production which we have 34:17 34 minutes, 17 seconds achieved basically in the last 6 months itself. So VFX is growing and VFX will grow as a business. Branded content is 34:26 34 minutes, 26 seconds growing like I said you know we already have two seasons delivered to Jio and they're streaming of The third season as we speak in fact go 34:34 34 minutes, 34 seconds just doing their last K and before the end of May the third season will be going live. We've already signed up brand for the fourth season. We start 34:42 34 minutes, 42 seconds filming brand for the fourth season of Bah and fourth season of Baated to go live on Jio in September. So we are 34:49 34 minutes, 49 seconds really accelerating bah as an IP massive breakthrough on bah is a new uh revenue opportunities that 34:59 34 minutes, 59 seconds we've got through an English version where we calling it watch it made we are dubbing bah into English and uh 35:06 35 minutes, 6 seconds distributing that to over 150 award advertising video on demand platforms worldwide which will give us you know 35:13 35 minutes, 13 seconds extra revenue uh that we never anticipated. uh our second show branded content show uh which is um medical 35:21 35 minutes, 21 seconds gurus we've almost finished finding a brand hospitals for season one for that so there's good production out there as 35:27 35 minutes, 27 seconds well and obviously the new kid on the block is the AI films that we're doing which is our first film with Kingdom games and like I mentioned earlier 35:36 35 minutes, 36 seconds please definitely do check out the trailer of Kingdom Gates which is online for the world to see you'll be really impressed with what you see so we are 35:43 35 minutes, 43 seconds gaining a lot of traction there X has been uh flat. I would say it did not uh 35:50 35 minutes, 50 seconds uh worldwide BP was not adopted as a production tech or has not yet I cannot say was but I say has not yet been 35:58 35 minutes, 58 seconds adopted as much as most people thought it would. So BP has been flat. It's not really growing for us. Uh so yeah so 36:05 36 minutes, 5 seconds that's that's that's the one area which which we are not seeing too much growth but all other areas we are seeing a tremendous growth. 36:12 36 minutes, 12 seconds Okay. Uh just to reiterate uh this topline target you're looking at is around 80 crores and uh bottom line is 36:20 36 minutes, 20 seconds about 85 and 1618 in PAT right correct six 15 to 16 in 36:30 36 minutes, 30 seconds okay okay yeah those are my questions I'll get back in with you for another question thank you Sure 36:38 36 minutes, 38 seconds thank you Eliza and centerman a reminder to all if you wish to ask any question you may press star and one on your touchstone telephone. 36:48 36 minutes, 48 seconds The next question is from Ishan Sha from Morning Star. Please go ahead. Hello. 36:56 36 minutes, 56 seconds Yes, good afternoon. 36:58 36 minutes, 58 seconds Yeah, good afternoon. So, yeah, first of all, congratulations for your result. Thank you, sir. 37:05 37 minutes, 5 seconds Yeah. So I just wanted to ask that the employee cost fell 13%. While the 37:12 37 minutes, 12 seconds revenue nearly doubled. So may I know so what exactly happened there? 37:19 37 minutes, 19 seconds No. So it wasn't just employee cost 10 13% nearly double. So see when the strikes period was going on we were carrying the cost of that employee. So 37:28 37 minutes, 28 seconds we took active measures in let's say reducing a lot of our uh overhead employee cost in North America. Now when 37:35 37 minutes, 35 seconds you reduce you know even one person in North America that's reducing literally 20 people in India because the cost is so much of the North American person. So 37:44 37 minutes, 44 seconds we really went hard on reducing cost in North America. So there is a massive cost reduction there in terms of employees 37:52 37 minutes, 52 seconds of you know we had it's not too much of cost it's just that we had better productivity and better 38:00 38 minutes use of the current employee number 38:06 38 minutes, 6 seconds okay okay yeah uh understood and I have another question like uh so the uh pack 38:13 38 minutes, 13 seconds margin is around 17.8% 8% right. So, so like it is it one time like one time 38:21 38 minutes, 21 seconds thing or you can sustain this on year on year. 38:25 38 minutes, 25 seconds So in fact our efforts are to better the tax margin uh as we progress you know any company works very hard to you know 38:32 38 minutes, 32 seconds improve productivity uh so that we can better pack margin and it is our endeavor to try to better the pack margin uh for FI27. 38:42 38 minutes, 42 seconds Okay. Yeah. Uh so any one time games that are sitting in current numbers 38:48 38 minutes, 48 seconds current numbers so that I should know about or we should know about. There's no there's no unusual onetime gain. Uh 38:57 38 minutes, 57 seconds yes there is a onetime gain thanks to Donald Trump which is the FX game that we benefited from which is great right 39:04 39 minutes, 4 seconds every business revenue you know. So the one time the other revenue items other revenue that you see this is the effect 39:12 39 minutes, 12 seconds game the foreign exchange game which is the rupees feeler you know we see invoice 6 months earlier and a client gets paid after 6 months and the 39:20 39 minutes, 20 seconds rupees are stronger we benefit from that okay yeah understood yeah so uh I have 39:27 39 minutes, 27 seconds one last question so where do you see the evict the margins that are normalized once the hiring and scaling happen 39:35 39 minutes, 35 seconds so like I said you know uh every business strives and and like every business dig especially one of our focuses this year is to improve 39:44 39 minutes, 44 seconds productivity uh and we are going extremely strong on uh implementing AI uh systems and AI based uh production 39:53 39 minutes, 53 seconds technologies within the company. In fact just before this meeting I got off a call with the technology team at Digico where we are introducing the new things which will improve our hotel productivity uh especially quite a bit. 40:04 40 minutes, 4 seconds So uh you know we are we are working very hard on increasing productivity through AI tools. Now AI is developing so far that you know while I may think 40:13 40 minutes, 13 seconds that you know we will improve productivity by 2% or 3% or 4% this year. So there are some new tools come which could help us improve. So we 40:21 40 minutes, 21 seconds keeping an eye out for these new tools and technologies meaning our target is to improve productivity by 3% at least this year. 40:31 40 minutes, 31 seconds Okay. 40:32 40 minutes, 32 seconds Uh okay. Yeah. Great. Uh so that's all from my side. Uh thank you. Thank you sir. 40:43 40 minutes, 43 seconds Thank you. The next question is from Rupin Ma as an individual investor. Please go ahead. 40:55 40 minutes, 55 seconds Hello. Yeah. Am I audible? Yes. 41:00 41 minutes Yeah. Thank you sir. Thank you for the opportunity. I know they are having having a great chat with you but I have one question that uh what's your free cash flow for 26. 41:12 41 minutes, 12 seconds I I don't I don't have that answer immediately right now. I'll have to check the numbers. 41:18 41 minutes, 18 seconds So I'm sorry but I don't have an answer for that immediately. 41:20 41 minutes, 20 seconds No worries. No worries. No worries. Have any uh profit or cash difference? 41:26 41 minutes, 26 seconds I mean what is there is a difference between the profit and that we are reaching that to the cash flow you have this 41:34 41 minutes, 34 seconds no I don't have that numbers right now the cash numbers with me right I'm really sorry no worries no worries uh my question is 41:42 41 minutes, 42 seconds what is your data days and has collection improved this year so data days has come down uh year on 41:49 41 minutes, 49 seconds year basis uh between FI20 uh this you know last year and this year and we are working very very hard like I said even 41:56 41 minutes, 56 seconds before in this call to you know improve that and we are already seeing uh an improvement but honestly it's going to take 6 to 12 more months for uh cash 42:05 42 minutes, 5 seconds flow cycles and data days to regularize and when I say regularize you know the the the data cycle in the industry is anywhere around has even before the 42:13 42 minutes, 13 seconds strikes was typically around 120 days so you know now a post strikes we going to be experiencing regularization meaning 42:20 42 minutes, 20 seconds you know 120 to 130 days which is definitely better than today's situation and I you take that anyway but we would definitely you know uh I'm I'm very 42:29 42 minutes, 29 seconds conservatively I'm projecting 6 to 12 months for it to come to that level okay okay and uh what is your debt 42:38 42 minutes, 38 seconds position as of 26 national our debt position so if I look at 42:45 42 minutes, 45 seconds debt debt loans no yeah loans so outside outside debt is around 29 42:52 42 minutes, 52 seconds crores but that includes the bank OD NTP and all of that also so complete. 42:57 42 minutes, 57 seconds Okay. Are we planning to you know loosen it up? I mean so I I don't know whether you missed the 43:04 43 minutes, 4 seconds earlier part but like I said you know we are actively working towards a QIP or a preferential fun of 30 to 25 cr. The 43:11 43 minutes, 11 seconds primary objective of that is to lighten the debt of the company. 43:15 43 minutes, 15 seconds Okay. Okay. Okay. Fair enough. Uh just I will get back into the queue uh for any further questions. Thank you. Thank you. 43:23 43 minutes, 23 seconds Thank you so much. 43:25 43 minutes, 25 seconds Thank you. The next question is from Mahes S from Vi Capital. Mr. Mah, please go ahead. 43:35 43 minutes, 35 seconds Uh Mahes, I'm sorry I said your full name Mah and V. Okay. Yes, sir. 43:48 43 minutes, 48 seconds Yeah. Uh uh I used to need to know like uh if uh demand is soften again or like 43:56 43 minutes, 56 seconds you know audio is not clear. I cannot hear you clearly. Uh can you hear me now? Yes. Yes we can we can. Yes sir. 44:05 44 minutes, 5 seconds Yeah. Uh so I was just asking like if uh you know global Hollywood demand gets softened again like or maybe you know AI 44:13 44 minutes, 13 seconds cuts VFX budgets. So what's your plan to deal with this? 44:18 44 minutes, 18 seconds So uh a it's not going to happen very very soon uh because there are two or three good things uh that have happened. 44:25 44 minutes, 25 seconds So everyone in the VFX industry was scared about it that AI will cut VFX demand largely but uh there was a very 44:32 44 minutes, 32 seconds interesting announcement by the academy uh recently that uh AI films or AI actors will not qualify for academy 44:40 44 minutes, 40 seconds awards. So now any of these big budget movies that we thought will become AI will technically cannot become AI because they also work a lot for the 44:48 44 minutes, 48 seconds awards. So that is one very thing that happens. B see uh all those projects which are shooting right now or have 44:57 44 minutes, 57 seconds just started shooting or have just you know writing uh they will now come into the VFX phase 45:04 45 minutes, 4 seconds any over the next 15 18 months right. uh so what would is that AI if if there is 45:11 45 minutes, 11 seconds going to be any AI based reduction in India that's at least for the next 18 months we don't foresee that for sure if there is going to be any reduction also 45:19 45 minutes, 19 seconds because I mean you know the things that are already filming right now they are filming and once you film they're going to come into the VFX page so I think for 45:27 45 minutes, 27 seconds the next 18 months or 24 months we are very very confident that this will go affect post switch there could be an 45:34 45 minutes, 34 seconds effect we are preparing towards that with our uh you for different uh divisions at digior branded content AI based content production uh and you know 45:44 45 minutes, 44 seconds our various other AI platforms that we are working on so even if there is a slight disruption or a slight can you cannot completely disrupt it's 45:52 45 minutes, 52 seconds technically not possible if there's a slight disruption we will very well make up with our other divisions which we've been building 46:03 46 minutes, 3 seconds so that is why you know I keep saying that we no longer a a pure play VFX studio. We are transitioning into a 46:12 46 minutes, 12 seconds media and technology house so that we are not dependent purely on VFX and uh our revenues and profits won't drop uh 46:22 46 minutes, 22 seconds in the future if there is if if there is a slight uh you know uh drop in BFX revenues thanks to AI. So we are very well preparing for that. 46:35 46 minutes, 35 seconds Um okay got it. Uh uh can you also like uh tell me about any project like Indian 46:43 46 minutes, 43 seconds project Bollywood project you are working on or you know soon planning to work on. 46:50 46 minutes, 50 seconds We don't uh Bollywood projects have extremely low budgets with little or no margin. So we don't actively chase Bollywood projects or encourage Bollywood projects that have no margin. 47:00 47 minutes So technically if you ask me uh if you ask me what is the revenue from BF from Bollywood last year it was zero. 47:07 47 minutes, 7 seconds Okay. 47:10 47 minutes, 10 seconds Okay. Got it. And can can you also like uh talk a little about uh you know uh pipeline have and current order? 47:21 47 minutes, 21 seconds I'm sorry. 47:23 47 minutes, 23 seconds Like uh can you also you know like throw some light on project pipeline that you have and I just I just mentioned that uh 47:31 47 minutes, 31 seconds to someone else recently but yeah so if you look at it you know we've just done a quick check last month itself to plan our um workforce for the year with our 47:39 47 minutes, 39 seconds existing clients our existing outsource clients and we heard of uh indication of around 40 cr worth of work from our existing clients uh and plus uh you know 47:49 47 minutes, 49 seconds that that also includes you know things like the one piece and uh the range of powering with Amazon so we are very confident that you know if you're 47:58 47 minutes, 58 seconds starting the year around 40 45 crores worth of pipeline. Uh we are extremely confident of uh you know touching that 75 crores on mark on the FX side of 48:06 48 minutes, 6 seconds business and uh and the 10 to 12 crores on the branded content which will help us achieve our 85 crores. 48:16 48 minutes, 16 seconds Okay. Okay. Got it. Thank you for Thank you. 48:22 48 minutes, 22 seconds Thank you. The next question is from Vishakamisha as an individual investor. Please go ahead. 48:29 48 minutes, 29 seconds Uh good afternoon to you. Yes ma'am. 48:33 48 minutes, 33 seconds Uh yes sir. Also my question is uh is a new or what specifically is it? 48:44 48 minutes, 44 seconds Uh I'm I'm sorry. I'm sorry I I didn't hear you. Your voice was not very clear. Now can you hear me sir? 48:52 48 minutes, 52 seconds Yes it's much better. 48:54 48 minutes, 54 seconds Yes sir. My question is is project abu turn off revenue and what is specifically is left to execute? 49:04 49 minutes, 4 seconds Awesome. See project abu is not a project for the company which is a revenue project. It is a a project that we have created internally which you 49:12 49 minutes, 12 seconds know it's just about giving a name to something which we've given that you know people can relate to that when we talk. So it's it's a uh execution 49:19 49 minutes, 19 seconds strategy at city core which which basically tightens discipline, tighter delivery, tightens cost, improves 49:26 49 minutes, 26 seconds productivity uh and stronger financial management. So it's not a project of a client uh project. It is an internal 49:33 49 minutes, 33 seconds project at digior which we have uh you know created to improve productivity and uh work towards the future of the company. 49:42 49 minutes, 42 seconds Sure. also give us three concrete things aim actually changed in the business. 49:49 49 minutes, 49 seconds So one thing is for sure it definitely brought in discipline. It brought in the uh uh you know push towards sales where 49:57 49 minutes, 57 seconds we went very very aggressive on the sales where like I mentioned we've done over 250 meetings uh and uh and the 50:04 50 minutes, 4 seconds productivity the the keen eye towards going into the smallest of things where we see even changing a small lever 50:12 50 minutes, 12 seconds somewhere can improve the productivity of that one division or department by point 1.2.3 2.3% 50:19 50 minutes, 19 seconds and you change you know 15 levers across the company in different different cases uh that suddenly that 2.3 then at a glo at a companywide level become 3 or 4%. 50:29 50 minutes, 29 seconds So present everyone you have helped us identify a small little thing which many businesses uh you know miss out sometimes. So we're going you know not 50:38 50 minutes, 38 seconds we're not looking at the business in a macro level we are looking at on a micro level. Uh so that's one of the major things that uh you know we we were able to achieve through uh this discipline. 50:51 50 minutes, 51 seconds Awesome. Also my uh last question is we launched this after the turkey financial year 2025 right? 50:58 50 minutes, 58 seconds I'm sorry. I'm sorry. I'm audible to you. Yes. 51:04 51 minutes, 4 seconds I was asking you launched this after a tough year financial 20125. So what went wrong in a financial year 2025 that needed fixing? 51:14 51 minutes, 14 seconds So one of the main things that fixed automatically which was anticipated was the inflow of work because you know there was little or no work in the VFX 51:23 51 minutes, 23 seconds industry globally in the calendar year 24 because of the strikes in Hollywood which happened in 23. So when strikes 51:31 51 minutes, 31 seconds happened in 23 it was basically the writer strike right. So when writers came back to writing projects in uh you 51:38 51 minutes, 38 seconds know FI 24 not F5 the calendar year 24 in the early 24 and like I just mentioned some time back that once from 51:46 51 minutes, 46 seconds the phase of writing to the phase of VFX it can be anywhere between 15 to 18 months because writing then pre-production then shooting then 51:54 51 minutes, 54 seconds editing and then it comes to VFX. So that's why a lot of project majority projects were in writing in early 24 that's why most of 24 the work had 52:03 52 minutes, 3 seconds really thinned a lot. So it was not about uh what so the work really started booming from early 25 literally that 52:11 52 minutes, 11 seconds that changed obviously the revenue number to a very large extent. 52:16 52 minutes, 16 seconds Thank you sir. Thank you sir. Thank you so much. 52:23 52 minutes, 23 seconds Thank you ladies and gentlemen. As there are no further questions, I now hand the 52:30 52 minutes, 30 seconds conference over to Miss Saki Panchiara from Korean Advisor. Over to you, ma'am. 52:39 52 minutes, 39 seconds Thank you everyone for joining the conference call digital studios. If you have any queries, you can write to us at uh research at the ratekaradvis.com. 52:48 52 minutes, 48 seconds Once again, thank you everyone for joining the conference. Thank you. Thank you. Thank you everyone. Thank you. 52:54 52 minutes, 54 seconds Thank you everyone and thank you again for attending the conference call. I really appreciate your time. Uh have a lovely day. 53:01 53 minutes, 1 second Thank you sir. 53:03 53 minutes, 3 seconds On behalf of Korean Advisers, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. 53:11 53 minutes, 11 seconds Thank you.