Phantom Digital

Phantom Digital Effects Limited delivered strong financial results for H1 FY26, with total consolidated income surging by 140.93% year-on-year to ₹84.98 crores. EBITDA increased to ₹28.62 crores, achieving a healthy margin of 32.41%. Net profit also saw significant growth, reaching ₹20.68 crores with a margin of 23.43%, and EPS improved to ₹13.87 from ₹6.09 in the prior year, reflecting the benefits of recent acquisitions and operational efficiencies.

The company successfully completed the integration of Tippett Studio in June 2025 and acquired full ownership of Milk Visual Effects (including Lola Post) with the first tranche paid. These acquisitions have expanded Phantom's global footprint across Europe and North America, complementing its strong Asian presence. The formation of Phantom Media Group (PMG) as an umbrella brand aims to unify operations and strategically position the company as a global creative technology group, leveraging the distinct strengths of each studio.

Phantom Digital is actively integrating in-house developed AI tools into its VFX pipeline to boost productivity and efficiency. These AI applications are primarily used for pre-visualization, commercials, faster asset creation, de-ageing, and face replacements, significantly reducing repetitive tasks. Management emphasized that AI serves as a tool to augment creative processes and expand market opportunities for clients with limited budgets, rather than replacing traditional VFX artists or high-end film production.

As of November 19, 2025, outstanding receivables stood at ₹61.49 crores, with ₹18 crores classified as older than 180 days. The company collected ₹19.53 crores against H1 FY26 sales of ₹47.11 crores, representing a 41.5% collection rate. Management is implementing stronger integration and centralized follow-up mechanisms, alongside a shift towards 90-day collection cycles, to improve cash flow predictability and collection rates in the coming quarters.

The company reported a robust order book of ₹201.32 crores as of October 2025, with nearly 80% originating from international projects. Additionally, a significant bidding pipeline of ₹817 crores provides strong revenue visibility for the upcoming quarters. This robust pipeline, combined with the contributions from integrated studios, is expected to drive solid growth for both standalone and consolidated operations in FY25 and FY26.

Phantom Digital is in the process of migrating from the SME platform to the main board, with completion anticipated by December 2025 or the first week of January 2026. Furthermore, the company is expanding its gaming segment by establishing an in-house gaming division, expected to be operational by February, following challenges in acquiring a suitable external company. This move aims to further diversify revenue streams and leverage existing expertise.

Management outlined a strategy to improve consolidated EBITDA margins to 44% and PAT margins to 25% conservatively, with a long-term target of 30-32% within two years. This will be achieved by leveraging the Indian entity's execution capabilities for acquired businesses, focusing on cost efficiencies, and strategically positioning the PMG brand. By using Tippett's name for high-end Western projects and Phantom for more affordable offerings, the company aims to attract a broader client base and enhance profitability across its global operations.