Compact Discs India Ltd is a leading player in the South Asian Animation Industry. Their major source of revenue comes from animation outsourcing projects. These animation projects (related to movies) are contractual and hence are not risky, but lack of any Intellectual Property Rights over it also reduces the scope for prolonged revenues.
In order to tackle that, they are coming up with two animation feature films "Eternal Love" and "Futebol with Pele". In the latter movie, Pele has been roped in as an executive producer. In March this year. Compact Discs has also inked a deal with BBC to co-produce a film "Blame It On The Bhangra". They have also reported having struck a deal worth $82 mn with a british production house to make an animation movie on Adolf Hitler.
The company also plans to come up with five animation degree awarding institutes, thereby foraying into the Education business.
Financials:
Q2 FY11: Sales at Rs 78.4 Cr, up from Rs 61.67 Cr in Q2 FY10
PAT Rs 16.87 Cr vs Rs 12.84 Cr in Q2 FY10
EPS for Q2 FY11 stands at Rs 17.62 vs Rs 13.42 for Q2 FY10
For the first half (H1) of FY10, sales were Rs 129.17 Cr vs Rs 105.88 Cr for H1 FY10
and PAT was Rs 26.96 Cr vs Rs 22.01 Cr in the same half last year.
Their current EPS for the first half of FY11 stands at 28.17. Thus, if the trend for the year is to continue, the EPS for FY11 can be around Rs 56.
The stock is currently trading at Rs 52, making the valuations very attractive, given the growth in sales keeping the profit margins intact.
The PE multiple based on the current EPS is less than 1 and the book value per share (bps) of the company, which stood at Rs 107.92 at the end of FY10 vs Rs 79.79 for FY09. The Price per book value multiple is also currently 0.48.
The Long term debt equity ratio stood at 0.21 for FY10, which shows the company in decent health.
Negatives
An extremely low promoter holding in the company (24.7%) coupled with a high public holding (60.29%) does not show confidence of the promoters.
Except the news about the movies they will be producing, no other news has come up. No footage of the trailer has been released as yet.
In order to tackle that, they are coming up with two animation feature films "Eternal Love" and "Futebol with Pele". In the latter movie, Pele has been roped in as an executive producer. In March this year. Compact Discs has also inked a deal with BBC to co-produce a film "Blame It On The Bhangra". They have also reported having struck a deal worth $82 mn with a british production house to make an animation movie on Adolf Hitler.
The company also plans to come up with five animation degree awarding institutes, thereby foraying into the Education business.
Financials:
Q2 FY11: Sales at Rs 78.4 Cr, up from Rs 61.67 Cr in Q2 FY10
PAT Rs 16.87 Cr vs Rs 12.84 Cr in Q2 FY10
EPS for Q2 FY11 stands at Rs 17.62 vs Rs 13.42 for Q2 FY10
For the first half (H1) of FY10, sales were Rs 129.17 Cr vs Rs 105.88 Cr for H1 FY10
and PAT was Rs 26.96 Cr vs Rs 22.01 Cr in the same half last year.
Their current EPS for the first half of FY11 stands at 28.17. Thus, if the trend for the year is to continue, the EPS for FY11 can be around Rs 56.
The stock is currently trading at Rs 52, making the valuations very attractive, given the growth in sales keeping the profit margins intact.
The PE multiple based on the current EPS is less than 1 and the book value per share (bps) of the company, which stood at Rs 107.92 at the end of FY10 vs Rs 79.79 for FY09. The Price per book value multiple is also currently 0.48.
The Long term debt equity ratio stood at 0.21 for FY10, which shows the company in decent health.
Negatives
An extremely low promoter holding in the company (24.7%) coupled with a high public holding (60.29%) does not show confidence of the promoters.
Except the news about the movies they will be producing, no other news has come up. No footage of the trailer has been released as yet.
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