Earlier known as Crest Communciations, Crest Animation Studios Limited (Crest), is one of India’s leading animation studios. When it had gone public, there was immense investor following for the stock as it was promoted by Mr.Shyam Ramanna, the son of eminent nuclear scientist Dr.Raja Ramanna, who was also the Chairman of the company, later passed away in 2004.
The company presented encouraging results for the third quarter ended 31st December 2007. The net revenue of the company, on a YoY, rose by a whopping 83% at Rs.22.75 crore. The company, during Q3, finalized & executed all relevant documents relating to the production of its 1st feature film titled Alpha & Omega & accordingly has recognized Rs.20.78 crore as revenue. It also delivered animation work for the existing TV contracts and such revenues for the quarter amounted to Rs.1.77 crore.
Expenses almost doubled from Rs.9.19 crore to Rs.18.99 crore. Its EBIDTA was up 38% at Rs.4.62 crore. PBT rose more than twice at Rs.1.09 crore and PAT was also up more than two times at Rs.1.06 crore.
OPM is at 20.3% while NPM is quite paltry at 4.66%. The margins are indeed quite thin and this is one thing which will keep the bottomlines subdued despite higher revenues. Unless the company manages to reduce its outgo that eats away any increase in sales, the bottomlines will continue to remain an issue. Also it has been that the third quarter is always the best for the company. Its earnings are at their best in the third quarter and this December too, the company has managed to keep on to this trend. Blame it on the cyclical nature of the business? Payments always come in during the last quarter?
Currently under production is Crest's first feature film in partnership with Hollywood's Lions Gate Entertainment, the first of a three-movie deal for worldwide theatrical distribution. Its working title is 'Alpha and Omega' and is based on a love story between an alpha wolf and an omega wolf, set on a backdrop of migration of wolves. This transaction is significant in that it enables the company to enhance its reputation as a recognized producer and co-owner of theatrical animation films and to expand its library of intellectual property rights.
By 2010, the company is looking at delivering at least one feature film every year. DE Shaw has a 14.99% stake in the company, acquired in 2006 for $40 million. The core promoters holding is just 15.89%.
Currently quoted at Rs.60, stay invested only if you have a long term goal in mind.
