Basilic Fly Stud

Consolidated total income for FY26 reached INR 418 crores, marking a 36.6% year-on-year growth from INR 306 crores in the previous year. PAT for the year stood at INR 50.6 crores, a 13.2% increase from INR 44.7 crores last year, with an EBITDA percentage of 20.89%. Standalone operational revenue also saw robust growth, increasing 64% YoY to INR 120 crores, while standalone EBITDA and PAT margins improved by 0.5% and 1.5% respectively.

The company invested INR 73 crores in FY26, not solely in AI software, but also in the Universal Scene Description (USD) pipeline, NetApp enterprise storage, and general workflow and tool upgrades. These investments aim to reduce operating costs by approximately 62% through a hybrid cloud model and enable the company to secure Tier 1 mandates by improving interoperability and reducing redundancy. Additionally, 14 senior leadership hires were made in FY26, contributing to business development, VFX supervision, and AI initiatives, with an estimated annual cost of GBP 1.2 to 1.5 million.

Basilic Fly Studio's order book for FY27 stands at INR 232 crores, complemented by an active bid pipeline of INR 456 crores. The company traditionally has a winning ratio of 60-70% for bids, but new senior hires have enabled bidding for larger ticket sizes, now ranging from 5-7 million GBP compared to the previous 1-2 million GBP. Management expects 90% of the existing orders to be executed by Q4 FY27, with some spilling into Q1 FY28.

The company reported debtors of INR 100 crores as of March 31, 2026, after initial collections. Significant recovery efforts led to INR 20 crores collected in March and an additional INR 17 crores in April/May, reducing the outstanding debtors to INR 86 crores. Management anticipates bringing aged receivables (over 6 months) under INR 40 crores by the end of Q1 FY27, demonstrating a focus on improving cash flow and balance sheet health. The company's cash balance is approximately INR 45 crores.

Following the acquisition of 'One of Us' in July 2024, Basilic Fly Studio is actively pursuing further inorganic growth. The company has evaluated 7-8 potential targets and is in advanced stages with 2-3 players, with a typical M&A ticket size (top line) ranging from INR 200-300 crores. The strategy focuses on geographical diversification into North America and Spain, as well as service diversification beyond gaming to include commercial and immersive experiences, although an earlier LOI is currently on hold from the seller's side.

The company has initiated the process for migrating to the mainboard, with eligibility expected by September 2026, and is actively working with a consultant to expedite this. While shareholder returns are always considered by management, the current priority is on investment and expansion into new technologies and markets, suggesting that significant dividend payouts are not an immediate focus as the company aims to reinvest for long-term growth.

Despite strong revenue growth, consolidated EBITDA margin for FY26 shrank by 2.6% to 20.9%, and PAT margin shrank by 2.5% to 12.1%. This compression is primarily attributed to the rescheduling of projects to FY27 and the initial period costs associated with the 14 senior leadership hires, whose full-year costs are expected to be absorbed in FY27. Management anticipates PAT to reach INR 65-70 crores in FY27, with a potential 1.5-2% annual improvement in PAT margin as investments yield returns and operational leverage increases.