Prime Focus: An overview - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Prime Focus: An overview

Dec 27, 2007

Prime Focus is one of the largest integrated post production and visual effects services company for films and TV content in the world. Prime Focus offers end-to end services and its suite of offerings covers every aspect of production and post production including camera rentals, digital intermediation for film, post-production (film and advertising) and visual effects (film and advertising). History
It began operations in 1996 as a TV post production house. In 2002, Prime Focus entered the film post production business and in 2005 it started offering visual effects (VFX) and post production services. It tapped the capital markets in 2006.

Growth opportunity
Globally, the top 10 all time grossers are movies heavily loaded with visual effects wherein the post production and visual effects budget averaged to approximately 70% of the cost of production (Titanic, Star Wars, Lord of the Rings, etc.). A similar trend can be observed emerging in India. Three of the recent big Bollywood hits – ‘Dhoom 2’, ‘Krissh’ and ‘Don’ had visual effects of more than 50 minutes each. The VFX and animation industry in India is said to be growing at a robust rate of 38% and 25% respectively.

Increasing labour costs are forcing international production houses/VFX houses to outsource part of the work to other low cost studios. India has the competitive edge in terms of technical know-how and talent to emerge as a major outsourcing hub for entertainment technology. The cost differential for India in comparison to the UK market is as high as 6-8 times and 3-4 times for the US market. Industry experts believe that Indian entertainment technology services have the ability to grow at a CAGR of around 35% over the next 10 years.

Client base
It services the Indian film industry, Indian advertising industry, Indian television broadcasting companies and Hollywood film industry. Leading ad agencies such as HTA, O&M and FCB Ulka and top ad film production houses such as Corcoise Films and MAD Films are its clients. In the case of Hindi film industry, almost 60% of the industry's post production requirements are met by Prime Focus. Its client list includes reputed film makers such as Sanjay Leela Bhansali, Vidhu Vinod Chopra and Sajid Nadiadwala. Leading TV channels such as Star TV, Sony, Zee and MTV and music companies like Tips, T-Series, Sony Music and Virgin Music are also its clients.

Facilities
Prime Focus has 4 studios in Mumbai at different locations across the city. It has set up studios in Hyderabad and Chennai to cater to the South Indian film industry. Prime Focus London was created in 2006 by the merger of VTR Pic, a high-end Dl and post production facility that is amongst the top five in UK and Clear Pic, a boutique visual effects services company. Prime Focus acquired a 55% stake in VTR Pic. The name VTR was changed to Prime Focus Pic. Prime Focus Pic acquired a 100% stake in Clear P|c to facilitate its entry in the international special effects and animation space.

High-end infrastructure
Prime Focus has high-end infrastructure and is in many cases the only company to possess such infrastructure. It was the first company to get the MILO Motion Control rig in India, which is also the only rig in Asia. It is the first and only Indian company with its own time slice rig for visual effects shots. Such high-end infrastructure improves its quality of work giving it an edge over its competitors.

High quality work
Prime Focus offers high quality of services, which is reflected by the awards won by the company. It won the FICCI Frames (BAFF) Award 2007 for the best visual effects in a television commercial. It had secured all the nominations in this category. The movie for which it had provided visual effects services won the best VFX Award at the Zee Cine Awards 2005.

As the company is venturing into international outsourcing, it faces increased competition from other outsourcing destinations such as Australia, NewZealand, Korea and China. Besides this, high margins enjoyed in the domestic business may not be sustainable due to the increasing competition. Its equipment are also subject to technological obsolence. However notwithstanding the risk factors, the size of the opportunity for the company is huge and we feel that the company is on a high growth trajectory.


Equitymaster requests your view! Post a comment on "Prime Focus: An overview". Click here!

1 Responses to "Prime Focus: An overview"

R Sathyamurthy

Aug 7, 2010

Post this overview, I wonder why this stock missed your hidden treasure hit list when the stock was hovering around Rs.100 levels sometime in March 2009. Even with your conservative outlook you would have seen a five bagger, if not a ten bagger as it has turned out today.

This is especially intriguing since you had found this share good enough around its peak price of around Rs.1400/-.

This would have been a better pick from your analysts than Compact Discs.

Do you agree?

Like 
  
Equitymaster requests your view! Post a comment on "Prime Focus: An overview". Click here!

More Views on News

PRIME FOCUS Announces Quarterly Results (4QFY19); Net Profit Up 133.0% (Quarterly Result Update)

Jun 14, 2019 | Updated on Jun 14, 2019

For the quarter ended March 2019, PRIME FOCUS has posted a net profit of Rs 206 m (up 133.0% YoY). Sales on the other hand came in at Rs 7 bn (up 14.5% YoY). Read on for a complete analysis of PRIME FOCUS's quarterly results.

PRIME FOCUS 2017-18 Annual Report Analysis (Annual Result Update)

Apr 10, 2019 | Updated on Apr 10, 2019

Here's an analysis of the annual report of PRIME FOCUS for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of PRIME FOCUS. Also includes updates on the valuation of PRIME FOCUS.

PRIME FOCUS Announces Quarterly Results (3QFY19); Net Profit Up 476.1% (Quarterly Result Update)

Feb 22, 2019 | Updated on Feb 22, 2019

For the quarter ended December 2018, PRIME FOCUS has posted a net profit of Rs 264 m (up 476.1% YoY). Sales on the other hand came in at Rs 7 bn (up 7.3% YoY). Read on for a complete analysis of PRIME FOCUS's quarterly results.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

PRIME FOCUS SHARE PRICE


Sep 30, 2020 (Close)

TRACK PRIME FOCUS

  • Track your investment in PRIME FOCUS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

PRIME FOCUS - BALAJI TELEFILMS COMPARISON

COMPARE PRIME FOCUS WITH

MARKET STATS