Prime Focus - 3D is the biggest driver; needs to fix balance sheet - BRICS Research

Prime Focus (CMP Rs45, Not Rated)

BRICS Research met the management of Prime Focus (PF), which is a post-production, visual effects (VFX), 3D-conversion, and digital media asset management company. It has 4,500 employees and takes on projects across the globe.

Valuation and outlook: Based on annualised H1FY12 numbers, PF trades at a P/E of 6.5x and EV/EBITDA of 5x FY12. We believe its strong order book of US$130mn offers revenue visibility. Its 3D business will continue to grow backed by low content availability (only 68 titles worldwide currently) and competitive advantages. But the stock may not rerate till PF resolves its balance sheet issues.

Source : Equity Bulls

Keywords