Basilic Fly Stud — Q2 FY26 earnings call

Call held 12 Nov 2025

Management summary

Basilic Fly Studio reported strong Q2 FY26 results, with consolidated revenue growing 146.3% to INR 109.5 crores and PAT increasing 117.1% to INR 26.8 crores. For H1 FY26, consolidated revenue reached INR 190.5 crores, up 146% YoY. The company strengthened its liquidity with a INR 48.3 crores net cash surplus and a INR 85 crores QIP, while also reducing DSO significantly. However, H1 consolidated PAT margins saw a slight decline to 14%, and operating cash flow was negative INR 17.1 crores, primarily due to overseas pricing pressures and timing of revenue recognition.

Highlights

  • Q2 FY26 consolidated revenue grew 146.3% YoY to INR 109.5 crores.

  • Q2 FY26 consolidated PAT grew 117.1% YoY to INR 26.8 crores.

  • H1 FY26 consolidated revenue grew 146% YoY to INR 190.5 crores.

  • Net cash surplus strengthened to INR 48.3 crores, following a successful QIP of INR 85 crores.

  • DSO reduced by 98 days to 92 days compared to H1 last year.

Concerns

  • H1 FY26 consolidated PAT margin declined to 14% from 15.9% in H1 last year.

  • Operating Cash Flow was negative INR 17.1 crores in H1 FY26, compared to positive INR 3 crores last year H1.

  • Overseas subsidiary margin shrinkage due to pricing pressure impacted consolidated margins.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹109.5 Cr
    YoY +146.3%
  • EBITDA
    ₹38.7 Cr
    YoY +107%
  • PAT
    ₹26.8 Cr
    YoY +117.1%
  • EPS
    ₹10.2
    YoY +104.5%

H1 FY26

  • Revenue
    ₹190.5 Cr
    YoY +146%
  • PAT Margin
    14%
  • DSO
    92 days
  • Operating Cash Flow
    ₹-17.1 Cr

What they filed

Q1 FY27: revenue up 28.1%, net profit up 17.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue19 12 28 20 34 +83%39 +231%27 −4%26 +28%
EBITDA7 4 12 9 19 +157%17 +355%8 −31%11 +29%
Net profit6 1 6 5 12 +105%12 +859%3 −51%6 +17%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • India Standalone (H1 FY26)
    ₹55.5 Cr Revenue₹17.2 Cr PAT31% PAT Margin

Capital allocation

high confidence
  • M&A Deal Acquisition · Announced

    To diversify into North American market, immersive experience and advertisements for brands.

    Acquisition size ranges from INR 250 crores to INR 400 crores in revenue; evaluating options where larger size has thin profit while smaller size has higher margin return.

    Balakrishnan: "our main lookout is to diversify into North American market... immersive experience and advertisements for brands." (page 10); Gaurav Mehra: "ranges into the range from close to INR 250 crores to the INR 400 crores range." (page 17)
  • Liquidity Cash ₹48.3 Cr Net cash surplus following successful QIP of INR 85 crores, positioning the company for growth.
    Balakrishnan: "Our EBITDA margin stood at 20.3% and we have strengthened our liquidity position with a net cash surplus of INR 48.3 crores, following our successful QIP of INR 85 crores." (page 3)

Guidance & targets

Revenue

  • H2 FY26 Consolidated Revenue Revenue · H2 FY26 · Medium confidence INR 400-500 crores
    we may fall into the range of close to INR 400 crores to INR 450 crores. That's the target, but we still strive for the original higher target of up to INR 500 crores.

    — Gaurav Mehra

  • VFX Outsourcing Incentives (Annual) Revenue · annual basis · Medium confidence INR 2.5-3 crores
    it may go to the size of INR 2.5 crores to INR 3 crores value on the annual basis.

    — Gaurav Mehra

Margin

  • Consolidated PAT Margin Margin · near future · Medium confidence above 30%
    I think in the near future, we do foresee aim SA margintarget it above 30% or around the 30% as a sustainable one.

    — Gaurav Mehra

Capacity

  • Bengaluru Branch Expansion Capacity · within the financial year · Medium confidence 50 plus (headcount/capacity)
    we expect it to be ramp up very fast reaching to the level of within the financial year 50 plus.

    — Gaurav Mehra

  • Total Revenue Generation Capacity (without acquisition) Capacity · given year · Medium confidence INR 550-600 crores
    If I take it at 100%, I think my mind broader number, we should be able to deliver in the range of the INR 550 crores to INR 600 crores.

    — Gaurav Mehra

Technology

  • Modular USD Pipeline Phase 2 Completion Technology · end of FY '26/Q1 FY '27 · High confidence completion
    Phase 2 focused on real-time multi-site asset inter-operations is on track for completion by end of FY '26/Q1 FY '27.

    — Balakrishnan

Efficiency

  • Modular UHD Pipeline Savings Efficiency · High confidence 15-20%
    this would really help 15 to 20 percentage of savings internally, even with London as well as India overall as a group, and also help transition of more work from London, Paris to India for higher CG work.

    — Balakrishnan

What to watch in Q3 FY26

H2 FY26 Consolidated Revenue

H2 FY26
Current H1 FY26 Revenue INR 190.5 crores
Target INR 400-500 crores

Why it matters

Key indicator of overall business growth and execution against guidance.

Gaurav Mehra: "we may fall into the range of close to INR 400 crores to INR 450 crores. That's the target, but we still strive for the original higher target of up to INR 500 crores." (page 9)

Risks & concerns

  • Pricing pressure in overseas business

    medium

    Overseas business experiencing pricing pressure due to available capacity in studios, impacting consolidated margins.

    Gaurav Mehra: "in the overseas business, there is a pricing pressure as the production is coming up, but many of the studios do have the available capacity. There is some pricing pressure and we are building our business development team to come over to that, winning the more niche projects, which are better priced." (page 9)

    Management acknowledged

  • Slower recovery of old receivables

    medium

    Recovery of old receivables is slower than target, as foreign studios are not fully back to pre-strike levels.

    Gaurav Mehra: "Old receivable recovery is slower to the target level as not all the foreign studios are back to the pre-strike levels, but we are making the gradual progress, and we collected 16% in the current financial year of the aged receivables." (page 7)

    Management acknowledged

  • Negative Operating Cash Flow in H1 FY26

    medium

    Operating Cash Flow was negative INR 17.1 crores, primarily due to peak revenue recognition towards the end of H1, increasing 'no due receivables'.

    Gaurav Mehra: "OCF, negative for the H1 '26, INR 17.1 crores versus positive INR 3 crores last year H1. Gap of INR 20.1 crores, primarily due to the peak revenue towards the end of the H1 results, resulting increase of INR 23 crores of "no due receivables"." (page 7)

    Management acknowledged

Q&A highlights

7 direct
Seasonality and H2 Revenue Outlook Direct
Balakrishnan: "H2 is always better because it really is very much clustered for the summer release." Gaurav Mehra: "we will very comfortably reach to the INR 400 crores as we clock INR 190 crores in the H1. With the new bids going on currently and the production scheduling is still getting finalized, we also expect H2 to be slightly better than the H1.

Clarifies the seasonal nature of the business and provides initial H2 revenue guidance, indicating significant growth over H1.

Asked by Shikhar Mundra

Consolidated PAT Margin Improvement with Offshoring Direct
Gaurav Mehra: "I think in the near future, we do foresee aim SA margintarget it above 30% or around the 30% as a sustainable one.

Addresses concerns about current margin pressure and sets a clear long-term profitability target, linking it to offshoring benefits.

Asked by Shikhar Mundra

Acquisition Strategy and Size Direct
Balakrishnan: "our main lookout is to diversify into North American market... immersive experience and advertisements for brands." Gaurav Mehra: "ranges into the range from close to INR 250 crores to the INR 400 crores range.

Outlines the strategic rationale and potential financial scale of upcoming M&A activities, which will be funded by QIP and internal accruals.

Asked by Shikhar Mundra / Viraj

Operating Cash Flow and DSO Concerns Partial
Gaurav Mehra: "This is primarily because of the high volume happened towards the tail end of the H1... we stand at INR 29 crores of the debtor, which is 'not due' to the sale which has happened either in the start of the September or towards the end of the September.

Explains the negative OCF and high receivables, attributing it to timing of revenue recognition and collections, but acknowledges slower recovery of old receivables.

Asked by Viraj / Mahesh

Impact of Indian Government VFX Incentives Direct
Balakrishnan: "We are exploring that. And so far in H1, there is not any incentive being included... we can be able to utilize this one for our future income and revenues. Particularly, we are very well-positioned because this is for overseas IP particularly." Gaurav Mehra: "it may go to the size of INR 2.5 crores to INR 3 crores value on the annual basis.

Highlights a potential new revenue stream and competitive advantage from government policies, though not yet realized in H1.

Asked by Viraj

Total Revenue Generation Capacity (without acquisition) Direct
Gaurav Mehra: "If I take it at 100%, I think my mind broader number, we should be able to deliver in the range of the INR 550 crores to INR 600 crores.

Provides an estimate of the company's organic revenue potential at full capacity, setting a benchmark for future growth.

Asked by Mahesh

Dividend/Buyback Policy Direct
Gaurav Mehra: "Definitely, Mr. Viraj. We are evaluating that and we look forward to be in a position to do some distribution.

Indicates management's openness to shareholder returns once liquidity and growth targets are met, suggesting future capital allocation priorities.

Asked by Viraj

Modular UHD Pipeline Benefits and Savings Direct
Balakrishnan: "this would really help 15 to 20 percentage of savings internally, even with London as well as India overall as a group, and also help transition of more work from London, Paris to India for higher CG work.

Details the operational efficiency and cost savings expected from technology investments, which will support margin expansion.

Asked by Chandresh Singh

2 min read 7 chapters

Detailed narrative

H1 FY26 Performance Overview

Basilic Fly Studio reported a strong H1 FY26, with consolidated revenue reaching INR 190.5 crores, marking a 146% year-on-year growth. PAT also saw a significant increase of 117% year-on-year, totaling INR 26.8 crores, while EBITDA margin stood at 20.3%. India's standalone performance was robust, with total income of INR 55.5 crores (1.6x YoY growth) and a PAT margin of 31%.

Strategic Growth Initiatives

The company successfully integrated "One of Us," yielding visible synergies and contributing to INR 265 crores in new wins during H1. The Bengaluru team commenced deliveries in October 2025, enhancing offshore capacity and leveraging India's cost advantage. Basilic Fly Studio also partnered with Netflix for a South Indian original project, strengthening its domestic footprint in high-end content.

Technology & Innovation

Phase 1 of the modular USD pipeline initiative was completed in March 2025, with Phase 2 on track for completion by end of FY26/Q1 FY27. This initiative aims to redefine collaboration across international and Indian teams, making the production network more seamless and efficient. The modular UHD pipeline is expected to generate 15-20% internal savings and facilitate work transition from London/Paris to India.

Market Landscape & Outlook

The global visual effects market is projected to grow from US$11.19 billion in 2025 to US$20.29 billion by 2034, at a CAGR of 6.83%. Management noted a revival in the broader industry, with major streaming platforms resuming content investment and tax incentives in key markets. The company's hybrid model, combining global creative excellence with India's efficiency, positions it uniquely in this evolving market.

Financial Health & Capital Allocation

Basilic Fly Studio strengthened its liquidity with a net cash surplus of INR 48.3 crores, following a successful QIP of INR 85 crores. This capital will be deployed for technology innovation, delivery expansion, and selective inorganic growth. Despite a positive DSO reduction to 92 days, operating cash flow was negative INR 17.1 crores in H1, primarily due to peak revenue recognition late in the period.

Acquisition Strategy

The company is actively pursuing acquisitions to diversify into the North American market, immersive experiences, and advertisements. Management is evaluating multiple options, with potential targets ranging from INR 250 crores to INR 400 crores in revenue. The QIP funds, along with internal accruals, will support these strategic inorganic growth initiatives.

Operational Efficiency & Profitability Targets

While H1 FY26 saw some margin shrinkage in overseas subsidiaries due to pricing pressures, management anticipates H2 to be stronger, driven by better employee utilization and overhead recovery. The company targets a sustainable consolidated PAT margin of around 30% in the near future, supported by operational efficiencies from technology integration and offshoring.

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