Basilic Fly Stud — Q4 FY25 earnings call

Call held 2 Jun 2025

Management summary

Basilic Fly Studio reported a transformative FY25 with console revenue tripling to ₹306 crores and adjusted PAT growing 33.1% YoY to ₹48.6 crores, largely driven by the successful integration of its UK subsidiary, One of US. The company's order book remains strong at ₹290 crores for the UK, and console DSO improved significantly. However, India standalone margins saw a decline due to fixed cost absorption during a period of lower revenue, and the company moved from a net cash to a net debt position, partly due to delayed collections.

Highlights

  • Console revenue grew 3x to ₹306 crores in FY25 from ₹106 crores in FY24, driven by timely delivery of won order book.

  • EBITDA increased to ₹62.7 crores in FY25 from ₹52.2 crores in FY24, showing 19.9% YoY growth.

  • Adjusted PAT for FY25 reached ₹48.6 crores, a 33.1% YoY growth, after accounting for one-time M&A expenses.

  • UK subsidiary order book stands at ₹290 crores as of May end 2025, with ₹165 crores (55%) already delivered by May end.

  • Console Days Sales Outstanding (DSO) improved remarkably to 78 days from 122 days in the last year, aided by better payment terms at the UK subsidiary.

Concerns

  • India standalone PAT margin declined to 24.2% in FY25 from 35.1% in FY24, and EBITDA margin to 37.3% from 50.1%, primarily due to lower revenue impacting fixed costs during the industry strike.

  • The company ended FY25 with a net debt of ₹8.4 crores, compared to a cash surplus of ₹40.3 crores last year, largely due to subsidiary acquisition and delayed collections from India.

  • India's standalone DSO remains high, and it may take another two quarters to reach pre-strike levels, despite gradual improvement in collections.

Key financials

  1. Console Revenue ₹306 Cr +188.6%YoY
  2. Console EBITDA ₹62.7 Cr +19.9%YoY
  3. Console PAT ₹45.6 Cr +24.9%YoY
  4. Console Adjusted PAT ₹48.6 Cr +33.1%YoY
  5. Console DSO 78 days
  6. Net Debt ₹8.4 Cr
  7. ROE 28%
  8. ROCE 23%

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
    24.2% PAT Margin37.3% EBITDA Margin30% Employee Cost to Revenue₹27.1 Cr H2 Collections₹22.9 Cr H1 Collections
  • UK Subsidiary (One of US)
    6.2% H1 PAT Margin12.6% H2 PAT Margin11% H1 EBITDA Margin15.3% H2 EBITDA Margin₹290 Cr Order Book (May 2025)₹165 Cr Delivered from Order Book (May 2025)₹35 Cr Monthly Run Rate (April/May)

Capital allocation

high confidence
  • Debt Net ₹8.4 Cr
    we ended the year with a net debt of INR 8.4 crores compared to the cash surplus of INR 40.3 crores last year. Major part of the surplus was used as in-house contribution for the subsidiary acquisition and rest has been utilized for increased working capital due to delayed collection from India outstanding debtors.
  • M&A One Of US Limited Acquisition · Integrated · Consideration ₹[object Object] (cash)

    Access to deep creative firepower, seasoned team of 350+ artists, legacy of excellence, prestigious client base, amplified ability to deliver large-scale complex work, optimized for quality and cost through India-led production.

    Consolidation happened by end of July, so FY25 includes 8 months of the acquired entity. Payback period estimated at less than 2 years. Contributed 11% PAT margin in H2 FY25 for the UK subsidiary.

    One of the most defining moments this year, was a successful collaboration of One Of US Limited - an award-winning VFX studio based in London... This acquisition has given us access to deep creative firepower... The consolidation happened by the end of the July. So technically FY '25 carry 8 months of the financial, of the acquired entity as per the accounting standard... I understand, we paid INR 42 crore the primary infusion into One of Us... So, it should be less than a 2-year payback at the bottom?
  • Liquidity Liquidity disclosed Console cash flow from operations turned positive at ₹9.6 crores versus ₹28 crores negative in the last financial year, primarily due to aged debtors.
    our console cash flow from the operations turned to be positive at INR 9.6 crores versus INR 28 crores negative in the last financial year primarily due to the aged debtors only.

Guidance & targets

Revenue

  • Revenue Revenue · FY26 · Medium confidence ₹450-500 crores
    Keeping the fingers crossed but with the current run rate we expect to land in the range of 450 crores to 500 crores by the end of FY26.

    — Gaurav Mehra

Profitability

  • Console Margin Improvement Profitability · FY26 · Medium confidence 2-3% increase
    At a high level we expect the margin to improve in the range of the 2% to 3% as we are done with the tech first phase completion and we have more opportunity to take work to India making the global delivery center.

    — Gaurav Mehra

  • Overall Console Margin Improvement Profitability · FY26 · Medium confidence 1.5-2% increase
    I said, we expect our overall console margin to increase by 1.5% to 2% comfortably and it may go even higher if the technology upgradation happen more quicker than expected.

    — Gaurav Mehra

Efficiency

  • Console DSO Efficiency · moving forward · Medium confidence within 60 days
    on a console level I think it should be within the range of the 60 days as we move forward.

    — Gaurav Mehra

  • DSO for New Orders Efficiency · moving forward · Medium confidence 90-120 days
    So, what will be the average receivables you can expect in this year, sir like 90 days or 120 days for the new things what we are doing for the new orders what we are completing so it can be 90 days or 120 days walk with.

    — Deepak Kotharo

Strategic Growth

  • Project Size Strategic Growth · future · Low confidence >$10-15 million
    But our future goal is to ensure to become a larger VFX studio to take up on projects in terms of more than 10 million to 15 million dollar and pound kind of project to work on.

    — Balakrishnan R.

What to watch in Q1 FY26

India Standalone DSO

within 2 quarters
Current High, may take 2 more quarters to reach pre-strike levels
Target Pre-strike levels

Why it matters

Improvement in India DSO is crucial for cash flow and reducing reliance on working capital.

Our console DSO - days sales outstanding improved remarkably to 78 days... while India DSO is still high and may take time for another two quarters to reach to the pre-strike period levels.

Risks & concerns

  • Delayed collections from India outstanding debtors

    medium

    Delayed collection from India outstanding debtors led to increased working capital utilization and contributed to net debt position; full recovery may take until Q3 FY26.

    Management acknowledged

  • VFX industry revenue phasing volatility

    medium

    VFX industry revenue monthly phasing is highly dependent on production schedules, leading to quarterly fluctuations unlike the straight-line pattern of the IT industry.

    Management acknowledged

  • Impact of industry strike on India standalone margins

    medium

    Lower revenue due to the industry strike impacted India standalone margins as fixed costs remained constant, leading to a higher percentage of other expenses.

    Management acknowledged

Q&A highlights

5 direct
FY26 Revenue and PAT Margin Guidance Direct
As I mentioned in my remarks, so with the current run rate, we expect to reach to the level of the INR 450 crores to INR 500 crores in terms of the top line and we expect our margin also to increase gradually from the current levels as we do more offshoring.

Analyst sought specific numerical guidance for the upcoming fiscal year, which management provided as a range for revenue and a percentage increase for margins.

Asked by Shikhar

Current Order Book Status Direct
If I talk about where do we stand as if now, We are winning the new orders and at this point of the time our order book stand close to INR 290 crores for the UK subsidiary and few big deals are in the pipeline.

Analyst inquired about the updated order book value, and management confirmed a strong UK subsidiary order book and ongoing new wins.

Asked by Shikhar

High Employee Cost in UK Subsidiary Partial
While the employee cost is higher into the overseas. As you know that we are placed into the London and France. You may already know that cost of living is highest in London and the resource cost is really high there. We are working towards the strategy, how we can balance the required skill set versus the volume that can be delivered from the India.

Analyst questioned the significantly higher employee costs in the UK subsidiary, prompting management to explain it's due to higher cost of living and skilled resources, with plans to balance it through offshoring.

Asked by Shikhar

Collection of Debtor Outstanding and India DSO Direct
So, to answer your question Mr. Marfatia, the number stands close to INR 47 crores-INR 48 crores, which is more than the six months debtor receivables. Having said that, as a heads up in my commentary, our collection started coming more from the H2.

Analyst sought clarity on aged debtor receivables and collection efforts, with management providing specific figures for outstanding amounts and recent collections.

Asked by Nishil Marfatia

Payback Period for One of Us Acquisition Direct
I think the payback being so good. If you see our cash flow, It reflects that on an net it has gone from INR 32 crore INR 33 crore and that's the net off of the cash lying with the acquired entity... So, it should be less than a 2-year payback at the bottom?

Analyst probed the financial performance and payback of the recent UK acquisition, with management indicating a positive cash flow impact and a payback period of less than two years.

Asked by Viraj

Future Acquisition Plans Partial
And in terms of future acquisition, we are not actively looking into anything as such. But if there is any value that comes in, is there any, if there is any proposition of any partnership that comes in with any attractive value as it develops then, we would be looking for.

Analyst asked about potential future M&A, to which management responded with a cautious but open stance towards inorganic growth opportunities.

Asked by Jenil

Request for Quarterly Financial Disclosures Direct
Your point is taken Mr. Deepak with a very serious note. As I said that we were already internally evaluating this. Very soon we should be able to give more updates on this.

Analyst requested the company to start providing quarterly financial results, which management acknowledged as a serious point and indicated they are evaluating it.

Asked by Deepak Kotharo

3 min read 6 chapters

Detailed narrative

FY25 Performance Overview & Strategic Growth

Basilic Fly Studio experienced a transformative FY25, with console revenue growing 3x to ₹306 crores from ₹106 crores in the previous year. This growth was significantly bolstered by the successful acquisition and integration of One Of US Limited, a London-based VFX studio. The acquisition provided access to a seasoned team of 350+ artists and expanded global operations, enabling the company to deliver world-class digital storytelling across borders and handle large-scale, complex projects efficiently.

Financial Highlights: Revenue, EBITDA, and PAT

For FY25, console EBITDA reached ₹62.7 crores, up from ₹52.2 crores in FY24, representing a 19.9% YoY growth. PAT stood at ₹45.6 crores, a 24.8% increase from ₹36.5 crores last year. After adjusting for a one-time expense of ₹4.03 crores related to merger and acquisition, the adjusted PAT for FY25 was ₹48.6 crores, reflecting a robust 33.1% YoY growth. The company also reported a strong H2 FY25 performance with revenue of ₹228.7 crores, EBITDA of ₹44 crores, and adjusted PAT of ₹36.3 crores, showing significant growth over the prior year.

Margin Analysis: India Standalone vs. UK Subsidiary

India standalone PAT margin for FY25 was 24.2% and EBITDA margin was 37.3%, both lower than FY24's 35.1% and 50.1% respectively. This decline was attributed to lower revenue impacting fixed costs during the industry strike. In contrast, the UK subsidiary (One of US) showed significant margin improvement, with PAT margin increasing from 6.2% in H1 to 12.6% in H2, and EBITDA margin rising from 11% to 15.3% in H2, driven by higher resource utilization and offshoring.

Order Book, Debt, and Cash Flow Management

As of May end 2025, the UK subsidiary's order book stands at ₹290 crores, with 55% (₹165 crores) already delivered. The company ended FY25 with a net debt of ₹8.4 crores, a shift from a cash surplus of ₹40.3 crores in FY24, primarily due to the subsidiary acquisition and delayed collections from India. However, console Days Sales Outstanding (DSO) improved significantly to 78 days from 122 days, aided by better payment terms from premium clients at the UK subsidiary, and console cash flow from operations turned positive at ₹9.6 crores.

Future Outlook & Strategic Initiatives

Basilic Fly Studio projects FY26 revenue to be in the range of ₹450-500 crores, with console margins expected to improve by 2-3% due to increased offshoring and tech integration. The company plans to set up an AI lab in collaboration with UK and India teams to drive innovation. Management aims to further reduce console DSO to within 60 days and is exploring opportunities for larger VFX projects exceeding $10-15 million, while also considering future inorganic growth opportunities.

Technological Innovation & AI Lab

The company has deeply invested in future-proofing technologies, embedding smart workflows with real-time cloud collaboration and AI-driven tools to automate tasks and optimize resource allocation. The first phase of technology integration is complete, enabling seamless work sharing between India and UK. A dedicated AI lab is planned in collaboration with UK and India teams, leveraging the UK-India trade agreement for R&D incentives and driving innovation in VFX production technology.

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