First‐mover advantage, Focused Positioning
We initiate coverage on Prime focus (PF) with a "Buy" rating with a price target
of Rs1110. Prime Focus is the largest integrated player (60% market share) in
the booming post‐production and visual effects (VFX) business in film and
advertising industry in India. A surge in the demand for VFX in movies, TV ads
and music videos in India, has allowed PF to effectively exploit its first mover
advantage in this field. Now, through its organic & inorganic growth strategies
of expansion in India and abroad, PF has also emerged as a key player in the
global VFX outsourcing space. We believe that PF's expertise and experience in
the industry, the cost arbitrage between the foreign and Indian VFX markets
and the proposed foray into US, will help it to grab a major pie of the global
outsourcing space. Going forward, we expect PF to continue to push for
increasing market share and improving EBITDA & net profit margins to be the
key fundamental drivers for Prime Focus.
We initiate coverage on Prime focus (PF) with a "Buy" rating with a price target
of Rs1110. Prime Focus is the largest integrated player (60% market share) in
the booming post‐production and visual effects (VFX) business in film and
advertising industry in India. A surge in the demand for VFX in movies, TV ads
and music videos in India, has allowed PF to effectively exploit its first mover
advantage in this field. Now, through its organic & inorganic growth strategies
of expansion in India and abroad, PF has also emerged as a key player in the
global VFX outsourcing space. We believe that PF's expertise and experience in
the industry, the cost arbitrage between the foreign and Indian VFX markets
and the proposed foray into US, will help it to grab a major pie of the global
outsourcing space. Going forward, we expect PF to continue to push for
increasing market share and improving EBITDA & net profit margins to be the
key fundamental drivers for Prime Focus.
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