Top 3 VFX Stocks in India to Add to Your Watchlist

Recall the 1990s tech boom, a time of groundbreaking innovation. India emerged not merely as a participant but as a key driver, attracting multinational corporations with its robust Information Technology (IT) outsourcing capabilities.

This era showcased India's burgeoning IT prowess, characterised by innovation, efficiency, and a subsequent economic surge.

Today, a similar scenario is unfolding, albeit with a distinct focus. The spotlight has transitioned from lines of code to pixels.

Major global production houses, burdened by substantial production budgets, are increasingly turning towards India.

The reason?

A new breed of wizards, VFX artists crafting cinematic magic frame by frame. Just like the IT revolution, India is poised to become the epicentre of another global shift, this time redefining the art of visual storytelling through the power of VFX outsourcing.

Here are the top 3 Indian VFX studios leading the global charge.

#1 Basilic Fly Studio

First on the list is Basilic Fly Studio.

Basilic Fly Studio Limited is a visual effects (VFX) studio headquartered in Chennai, India, with subsidiaries operating in Canada and the UK.

It has expertise in delivering cost-effective and high-quality VFX solutions for a range of media, including movies, television, web series, and commercials.

The company has worked on some prestigious projects such as Spider-Man: No Way Home (2021), Shang-Chi and Avengers: Endgame (2019), Mary Poppins Returns (2018), and more.

It has a presence in global markets with offices in London and Vancouver.

It has worked on 900+ Movie projects and 2,000 Series projects.

The company marked a significant milestone in 2023 with the launch of Lightrunner Studio in the UK, extending its capabilities to deliver top-notch visual effects for feature films, television, and advertising. With a strategic focus on hero environments, animated creatures/characters, and special effects, the new studio is poised to contribute innovative storytelling solutions to the entertainment industry.

Further, the company launched its IPO on 1 September 2023. The public issue was listed on 14 September 2023 at a whopping premium of over 175%.

Going forward, the company plans to open new studios in Europe, South Korea, and potentially expanding existing facilities in London and Vancouver. This suggests a focus on an international clientele.

The goal seems to be acquiring more projects directly from production houses, potentially reducing reliance on subcontractors.

Additionally, the company plans to increase its Revenue by 70%.

For more details, see the Basilic Fly Studio company fact sheet and quarterly results.

#2 Phantom Digital

Second on the list is Phantom Digital.

The company is a creative VFX studio specialising in film, web series and commercials.

It has delivered more than thousands of shots for domestic and international feature films, (Hollywood) web series & commercials in the past few years.

Apart from working for film production and commercials, it periodically takes up subcontracts from larger visual effects studios as well.

The company supports production houses by providing end-to-end services. As a TPN-certified studio, it offers a wide range of VFX services.

The company's specialisations include completing a Shot with final compositing, creating 3D elements photoreal creatures and other natural phenomena 3D ride animation.

The company on 12 March 2024, acquired an 80% majority stake in the two-time Oscar-winning North American outfit Tippett Studio.

The acquisition will give Phantomfx control over the operations and monetary aspects of the legendary visual effects production company founded by Oscar-winning filmmaker Phil Tippett.

The acquisition is expected to result in a significant revenue growth of 20-25% during the 2024-25 financial year. The company says Tippett Studio has several upcoming projects with major Hollywood studios.

Going forward, it plans for expansion in the European and North American markets.

With a targeted revenue growth of approximately 80% for the current year, the focus lies on securing more orders from offshore clients to fuel this ambitious growth trajectory.

For more details, see the Phantom Digital Effects company fact sheet and quarterly results.

#3 Digikore Studios

Last on the list is Digikore Studios.

Digikore Studios was founded in 2000 and it swiftly ascended to prominence by its involvement in over 200 Hollywood films and TV series.

Digikore Studios is among the select Indian VFX entities endorsed by major industry luminaries, including Disney/Marvel, Netflix, Apple, Paramount, Warner Bros., and Lionsgate.

Some of the notable works of Digikore Studios include Thor: Love and Thunder, Black Panther: Wakanda Forever, Deadpool, Titanic, Gosht Rider: Spirit of Vengeance, Transformer: Age of Extinction, Crouching Tiger, etc.

With a clientele spanning India, Australia, New Zealand, the US, and European markets, Digikore Studios is among the pioneering VFX studios in India, boasting deep connections across the global entertainment industry.

A recent highlight includes the appointment of a senior Netflix executive as Creative Director and VFX Supervisor on 21 March 2024, indicating a strategic move towards further enhancing its creative prowess.

The rapid surge of the over-the-top (OTT) entertainment domain has galvanised substantial growth within the VFX landscape. Having garnered the trust and acknowledgement of major industry players, Digikore Studios stands poised to emerge as a preeminent global VFX powerhouse.

Digikore Studios is all set for a giant leap this year. They are expanding into the North American market with a production facility in Canada.

The company has set a revenue target of Rs 1 billion (bn) for FY24-25.

For more details, see the Digikore Studios company fact sheet and quarterly results.

Conclusion

The current landscape of VFX within the broader Indian entertainment industry highlights its pivotal role and widespread integration across diverse platforms.

From its origins as a niche element, VFX has evolved into a fundamental component in crafting captivating and visually striking content.

This evolution is not confined to mainstream cinema but extends to web series, advertisements, and regional language films, showcasing its pervasive influence.

The pandemic has catalysed digital transformation, accelerating the shift towards online experiences and bolstering the digital media industry in India.

Projections indicate that the value of the digital media market in India is poised to exceed Rs 860 bn by 2025. Notably, a substantial portion (70-75%) of revenues in this sector emanates from international clients, indicating the global appeal and competitiveness of Indian VFX companies.

With sustained demand on the horizon, VFX companies are primed for exponential growth, leveraging their expertise and capabilities to meet the evolving needs of the digital entertainment landscape.

Nevertheless, it is always prudent to conduct thorough research before making any investment decisions.

Ensure that the investment aligns with your financial objectives and matches your risk tolerance level.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...