Basilic Fly Stud — Q3 FY26 earnings call

Call held 17 Feb 2026

Management summary

Basilic Fly Studio reported robust Q3 FY26 results with India standalone revenue and PAT growing 2.1x and 2.5x respectively, and consolidated revenue reaching ₹294 crores YTD, up 1.7x YoY. The company secured over ₹300 crores in new wins for April-December FY26 and increased offshore headcount by 58 FTE. However, consolidated EBITDA and PAT margins saw a decline of 2.8% and 2.4% YTD, attributed to strategic investments, one-off severance costs, and IndAS conversion impacts. Aged receivables remain a concern, though management expects improvement in coming quarters.

Highlights

  • India standalone revenue grew 2.1x YoY to ₹94 crores YTD.

  • India standalone PAT grew 2.5x YoY, with YTD PAT margin at 29.2%.

  • Consolidated revenue grew 1.7x YoY to ₹294 crores YTD.

  • New wins for FY26 April-Dec exceeded ₹300 crores, with over ₹200 crores in outstanding order book.

  • Offshore headcount increased by 58 FTE, and cloud infrastructure optimization is projected to save ₹5-14 crores annually from FY27.

Concerns

  • Consolidated EBITDA margin shrunk by 2.8% YTD to 19.9% (vs 22.7% last year).

  • Consolidated PAT margin shrunk by 2.4% YTD to 11.8% (vs 14.2% last year).

  • Aged receivables (>180 days) remained around ₹53.05 crores as of March 31, 2025, with only ~9% recovered by YTD December.

Key financials

  1. Consolidated Revenue ₹294 Cr +74%YoY
  2. Consolidated EBITDA Margin 19.9% -12.3%YoY
  3. Consolidated PAT Margin 11.8% -16.9%YoY
  4. Consolidated Total OCI 13% -12.1%YoY

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.

Capital allocation

high confidence
  • M&A One of Us (OOU) Acquisition · Integrated

    Strengthened creative capabilities, enhanced access to premium clients like Netflix, Amazon, Disney, Sony, Warner Bros., and expanded international market presence.

    70% majority stake acquired in July 2024, contributing to global delivery model and offshoring opportunities.

    A key strategic milestone for us has been the July 2024 acquisition of a majority stake, 70% in the UK-based subsidiary, One of Us (OOU), a company with a two-decade-old legacy of BAFTA and Emmy award-winning workforce strength of 300 professionals and project credentials for Damson, Thor, Napoleon, Crown and many more, including the recent Academy Award-nominated Mission: Impossible Project.
  • M&A Deal Acquisition · Pending regulatory

    To utilize remaining QIP funds for inorganic growth opportunities.

    M&A is at a very advanced stage of the LOI discussion for inorganic growth opportunities.

    We are yet to utilize the funds allocated for the inorganic growth opportunities and very happy to share that M&A is at a very advanced stage of the LOI discussion.

Guidance & targets

Revenue

  • Consolidated Revenue Run Rate Revenue · per quarter · High confidence ₹100 crores
    maintaining a run rate of Rs.100 crores per quarter at consol level

    — Gaurav Mehra

  • Top Line CAGR Revenue · annual · Medium confidence 25-30%
    But on an average, I think our CAGR is in the range of 25% to 30% on the top line.

    — Gaurav Mehra

Order Book

  • New Wins Order Book · FY26 April-December · High confidence >₹300 crores
    Our winning for FY26 April-December stands at greater than Rs.300 crores

    — Gaurav Mehra

  • Value Yet to Be Delivered Order Book · spread from January 2026 till December 2026 · High confidence >₹200 crores
    value yet to be delivered from the order book stand at greater than Rs.200 crores which is almost 50% of our YTD December annual run rate.

    — Gaurav Mehra

Cost Savings

  • Infrastructure Cost Reduction Cost Savings · upon completion by July 2026 · High confidence 50%
    expected to deliver approximately 50% reduction in infrastructure costs upon completion.

    — Balakrishnan R

  • Annual Infrastructure Cost Savings Cost Savings · FY27 and onwards · High confidence ₹5-14 crores
    This initiative is expected to deliver potential savings to the tune of Rs.5 crores to Rs.14 crores as it scales up over a period of time in FY27 and onwards.

    — Gaurav Mehra

Profitability

  • Margin Improvement Profitability · year-over-year · Medium confidence 1.5-2%
    I would say close to 1.5% to 2% that improving the margin.

    — Gaurav Mehra

QIP Utilization

  • Funds Utilized QIP Utilization · overall · High confidence 48%
    in an overall, we have utilized close to 48%-odd number

    — Balakrishnan R

What to watch in Q4 FY26

Consolidated EBITDA Margin Recovery

Next quarter/FY27
Current 19.9% YTD
Target Improvement of 1.5-2% YoY

Why it matters

Key profitability metric impacted by strategic investments; recovery is crucial for investor confidence.

Target 1.5-2% margin improvement year-over-year.

Risks & concerns

  • Consolidated Margin Compression

    medium

    Consolidated EBITDA and PAT margins shrunk by 2.8% and 2.4% YTD respectively, due to strategic investments, one-off severance costs, and IndAS conversion impacts, totaling 2.5-2.8% impact on total margin.

    Management acknowledged

  • Aged Receivables

    medium

    Receivables greater than 180 days stood at ₹53.05 crores as of March 31, 2025, with only ~9% recovered by YTD December, attributed to collection cycle and European holidays.

    Analyst acknowledged

Q&A highlights

7 direct
Reasons for margin dip and future stability Direct
If I consider all the initiatives, this all will cumulatively sum up close to 2.5% to 2.8% in the total margin. So, if you see the total OCI margin for the YTD, we stand at 13%, and if I add back this one-off, I stand at 15.8% versus 14.8% of the last year. So, in fact, operationally, the performance has been better than the last year, but because of this initiative, there is a slight dip of 1.8% at the total OCI level and 5% at the PAT level.

Clarifies the specific financial impact of strategic investments and one-off costs on current quarter margins, and management's view on future recovery.

Asked by Aniket Madhwani

Value of high-value projects Direct
Approximately, four projects, average of $2 million for each project. And that goes up to $8 million to $9 million for these four projects.

Provides a quantitative estimate of the revenue potential from key client engagements, indicating the scale of new business.

Asked by Viraj Mahadevia

Details of cloud cost savings and annual impact Direct
At the moment, we do have 60 users working in India who are logging to machines in London. And for that, it will be effectively between Rs.4.5 crores to Rs.5 crores of savings. And as we are growing, there will be more considerable savings as well, with more users we are adding into this.

Explains the mechanism of cost reduction through hybrid cloud adoption and quantifies the immediate and potential long-term annual savings.

Asked by Viraj Mahadevia

Employee cost increase and its impact on profitability Direct
If you see the revenue of the respective period, revenue itself has increased from Rs.93.4 crores to Rs.105 crores. It is not the same revenue. We should take the employee as a percentage of the revenue. So, in fact, our employee ratio is a percentage of the revenue has improved from previous period of 69.7% to 66.6% %, a significant 3% reduction at overall level.

Addresses concerns about rising employee costs by contextualizing them against revenue growth and highlighting an improvement in employee cost efficiency as a percentage of revenue.

Asked by Viraj Mahadevia

Status of aged receivables and collection efforts Direct
there is a significant close to 9% to 10% receivable which has happened which is a sizable number to the aged one. Now, we are pushing it more. We have more commitment, as you raised the concern, we have also raised the concern, and we are expecting larger parts to come in the current quarter and the following quarter.

Acknowledges the ongoing challenge of aged receivables, provides an update on recovery, and outlines management's plan and expectation for future collections.

Asked by Viraj Mahadevia

FY27 revenue and margin guidance Partial
But on an average, I think our CAGR is in the range of 25% to 30% on the top line. And our margin continuously improving gradually, which is part-and-parcel of our offshoring strategy as well as the different cost-saving initiatives being taken.

Provides directional guidance for future top-line growth and margin improvement, although specific FY27 numbers are deferred to a later call.

Asked by Pranay Jain

Impact of premium clients on receivables Direct
The age receivables are more for the India business, wherein we get the subcontracted business from the studios. Our foreign subsidiaries which get the direct contract with the production houses, such like Netflix, Disney and all, it is well in that.

Clarifies that aged receivables are primarily from the India business and subcontracted work, not from direct contracts with major international studios.

Asked by Pranay Jain

Progress on international payment terms post-acquisition Direct
It was a little bit stretched at that time, but that is a long back because we got integrated way back in July 2024. So, it is a long period for those things to get settled by now. So, all the things are over. Yes, at the time when we acquired, there were a few cases where it was a stretch which is now on routine.

Confirms that payment term issues related to the One of Us acquisition have been resolved and are now routine, indicating successful integration.

Asked by Praneet

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Detailed narrative

Robust Standalone Performance and Strategic Growth

Basilic Fly Studio reported strong standalone performance with Q3 revenue at ₹39 crores and YTD revenue at ₹94 crores, marking a 2.1x YoY growth from ₹46 crores last year. Standalone PAT also saw a 2.5x YoY growth, with YTD PAT margin reaching 29.2% compared to 23.5% last year. The company secured new wins exceeding ₹300 crores for April-December FY26, with an outstanding order book of over ₹200 crores yet to be delivered, signaling continued momentum.

Consolidated Margin Compression Due to Strategic Investments

While consolidated YTD revenue grew 1.7x YoY to ₹294 crores from ₹169 crores last year, consolidated EBITDA margin shrunk by 2.8% to 19.9% and PAT margin by 2.4% to 11.8% YTD. This compression is attributed to strategic initiatives including annual appraisal revisions, leadership hiring, one-off severance costs, and the impact of IndAS conversion, cumulatively affecting margins by 2.5-2.8%. Management expects these initiatives to improve long-term efficiency and scalability.

Enhanced Global Delivery Model and Talent Acquisition

The company is strengthening its global delivery model by increasing offshore headcount by 58 FTE and making strategic hires in business development and VFX supervision across UK and US markets. Notable additions include Adrian De Wet and Mariann for the Los Angeles market, and Audrey Ferrara and Teresa for the UK market, bringing extensive experience from major franchises. These hires are intended to enhance client engagement and business opportunities, particularly in the North American market.

Technology-Driven Efficiency and Cost Optimization

Basilic Fly Studio is transitioning from a full AWS-based workflow to a hybrid infrastructure model, aiming for a 50% reduction in infrastructure costs and potential annual savings of ₹5-14 crores from FY27 onwards. This shift involves centralizing storage in the cloud while bringing rendering and processes to India. The company has also deployed an AI-enabled performance monitoring system and implemented company-wide Universal Access to enhance productivity and accelerate creative output.

Aged Receivables and QIP Utilization Update

Aged receivables greater than 180 days stood at ₹53.05 crores as of March 31, 2025, with only about 9% recovered by YTD December. This situation is primarily from India business and was impacted by European holidays, though management expects larger parts to be collected in the current and following quarters. Of the ₹85 crores raised via QIP in September 2025, 48% has been utilized, with the remaining funds earmarked for inorganic growth opportunities, which are currently at an advanced LOI discussion stage.

Outlook and Future Growth Drivers

Management projects a top-line CAGR of 25-30% and aims for a 1.5-2% year-over-year margin improvement, driven by increased offshoring, cost optimization, and new business development efforts. The company is actively pitching for several high-value marquee projects, including three businesses and one with Amazon MGM, and is working on major projects for Netflix, Disney, and Warner Bros. The focus on a hybrid AI and VFX model for commercials and ads is also expected to drive revenue.

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