1. At a Glance – Lights, Camera… Leverage
Prime Focus Ltd is the kind of company that looks like a Netflix documentary from the outside and an RBI stress-test question paper from the inside. Market cap of ₹17,104 Cr, stock price hovering around ₹221, and a one-year return of 120% — which means the market has already done bhangra to the turnaround story. Latest quarter (Q3 FY26, Dec 2025) clocked ₹1,207 Cr revenue, ₹394 Cr operating profit, and ₹69 Cr PAT. That’s not a typo — OPM hit 33%, the kind of margin that makes FMCG CFOs nervous.
But before you shout “Oscar!”, look down at the balance sheet: Debt ₹5,255 Cr, Debt/Equity 3.02, Interest Coverage 1.79, ROE -16.7%. This is not a Netflix-and-chill balance sheet. This is a “sir, EMI due hai” balance sheet. Promoter holding is still strong at 60.8%, though it has been steadily diluted — probably to feed the VFX beast.
So yes, Prime Focus is back in fashion after the Hollywood strikes hangover. But is this a structural comeback or just one good trailer before interval? Let’s roll.
2. Introduction – From Bollywood Labs to Hollywood Gods
Founded in 1997 by Namit Malhotra, Prime Focus started as a scrappy Mumbai post-production house and evolved into a global VFX heavyweight. If Indian cinema needed color grading, DI, or post-production magic in the 2000s, Prime Focus was the jugaad. Then Hollywood happened. Then DNEG happened. Then Oscars happened.
Prime Focus today is less about Bollywood item numbers and more about Hollywood CGI explosions. Through its crown jewel DNEG, it has worked on Oppenheimer, Fast X, The Last of Us, and Dune: Part Two (yes, Academy Award winner). This is not a “smallcap media company” anymore — it’s a global creative factory.
But here’s the twist: creativity is capital intensive. Studios, tech, talent, render farms, AI engineers — sab cash khata hai. Over the years,
Prime Focus funded growth with debt, acquisitions, and complex group restructuring that would make even Big 4 auditors stretch their necks.
The last two years were brutal due to Hollywood strikes (WGA + SAG-AFTRA). Projects got delayed, utilization crashed, margins collapsed. FY24 OPM fell to 6% from 21%. Investors panicked. Then… Q3 FY26 happened. Margins bounced back. Suddenly everyone is an AI believer again.
But are we looking at a cyclical recovery or a sustainable rerating story?
3. Business Model – WTF Do They Even Do?
Think of Prime Focus as the invisible magician behind your favorite movie. You don’t see them, but without them, superheroes would look like cosplayers at Comic-Con.
Segment 1: Creative Services (90% of FY24 revenue)
This is DNEG territory. Visual effects, animation, stereo 3D conversion, post-production, editing, color grading — basically everything that makes actors fly, planets explode, and dinosaurs feel emotionally complex.
DNEG is globally respected. Multiple Oscars. Long-term relationships with Disney, Marvel, Netflix, Warner Bros, Universal. This is not vendor work — this is partnership work. High switching costs. Reputation matters more than price.
Segment 2: Tech & Tech-Enabled Services (10%)
Handled via Prime Focus Technologies (now consolidated under DNEG). Products like CLEAR® and CLEAR® AI automate media workflows for OTT platforms and broadcasters. Subtitling, dubbing, localization, compliance, mastering — boring but sticky revenue.
