Basilic Fly Studio Limited (BASILIC) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Basilic Fly Studio Limited Q3 and 9 Months FY 2026 Earnings Conference Call hosted by Valorem Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you.

Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Basilic Fly Studio Limited. On behalf of the company and Valorem Advisors, I would like to thank you all for participating in the company's earnings conference call for the third quarter and 9 months ended of the financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Balakrishnan, Managing Director and CEO of the company; Ms. Yogalakshmi, President, Business Strategy and Whole-Time Director; and Mr. Gaurav Mehra, Chief Financial Officer of the company. Without any delay, I request Mr. Balakrishnan to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi, and good afternoon to everyone. Warm welcome to you all for our earnings conference call for discussion of our performance for Q2 and YTD results for FY 2026. Before I give you the operational highlights of the period under review, let me first start by giving a brief overview of the company for some of those participants that may be new to our company. Basilic Fly Studio Limited started in 2013, incorporated as Private Limited in 2016, got listed as Public Limited in September 2023 with a record over-subscription of 287 times as an Indian global MNC visual effects studios providing end-to-end visual effects services across film, television series, web content, and commercials. Over last 1 decade, we have established ourselves as a trusted creative partner within the global visual effects ecosystem by consistently delivering high-quality outcomes across diverse formats and platforms. Our company operates through an integrated delivery model supported by studios across India, which is in Chennai, Pune, and Bangalore to start with, United Kingdom, France, and Canada with a workforce of over 750 talented professionals and growing, enabling seamless global project execution. This international presence allows us to remain close to our clients while leveraging operational strength across geographies. Our services span the entire visual effects value chain, including pre-visualization, asset creation, animation, effect simulation, lighting, rendering, and final compositing. This comprehensive capability allows us to deliver end-to-end solutions and position ourselves as a reliable partner for complex high-quality production. The key strategic milestone for us has been the July 2024 acquisition of our majority stake, 70%, in U.K. subsidiary One of Us, a company with 2 decades rich legacy of BAFTA and Emmy Award winning workforce strength of 300 professionals and project credentials of Damsel, Thor, Napoleon, Crown, and many more, including a recent Academy Award nominated Mission Impossible 7. This acquisition has strengthened our creative capabilities, enhanced access to premium clients like Netflix, Amazon, Disney, Sony, Warner Brothers and more, and expanded our international market presence as well. It also aligns with our long-term vision of building a globally integrated visual effects platform. We continue to serve leading global studios, streaming platforms, and production houses, supported by long-standing client relationships and a strong foundation of repeat business. These enduring partnerships reflect the trust our clients place in our creative capabilities, execution excellence, and delivery consistency. Now, coming to the business performance and operational highlights for the period under review. This year, we continue to deliver strong business performance, delivering revenue growth of 2.1x and PAT growth 2.5x for India standalone business, maintaining run rate of INR 100 crore per quarter at control level. And Gaurav will cover numbers in detail in his briefing. Such robust growth is the result of industry rebound with company taking advantage of vendor of first choice for production houses such as Netflix, Disney, Amazon, and more. I am also pleased to share with the investors that 3 of our projects, Mission Impossible: The Final Reckoning, The Electric State, and Shutter Bird, got nominated for Academy Awards and shortlisted and reached to the top 20 level recently. Big thanks to our VFX team for the hard work and maintaining consistency year-over-year. This recognition reinforces our position as the trusted visual effects partner to leading global studios and streaming platforms. Happy to share that we added 12 new clients, while serving 56 active clients across regions of Europe, U.K., U.S., Canada, and Australia, and also delivering successfully 430 projects on schedule and receiving multiple client appreciation across international and domestic market. Kudos to our professional teams across global locations and thanks to our clients for the trust and confidence. I am happy to share that the company is investing in strengthening global business development teams and we got four senior leaders joined us across the U.K. and U.S. markets. Adrian De Wet and Marianne Speight joined us as Creative Director and Business Director respectively for our Los Angeles market. Adrian bringing experiences from marquee global franchises such as Harry Potter, The Matrix Reloaded, The Hunger Games, and Hellboy. And likewise, Marianne worked for Guardians of the Galaxy, Justice League, and Aquaman. Likewise, we also recruited Audrey Ferrara and Theresa joined us for the U.K. market. Audrey's notable contributions are Mufasa: The Lion King and The Jungle Book, she is one of the most favorite VFX supervisors for Disney. And likewise Theresa worked for Godzilla: Influx, and Captain and Marvel. In addition, we are also onboarding a seasoned Creative Head and VFX Supervisor from ILM experience, who will be starting in London effective March 1st, who will lead end-to-end international VFX delivery as well as high-value domestic mandates as well. We are also strengthening our supervisory bench with 2 more VFX supervisors joining from DNEG and MPC, both bringing strong AI-led production expertise aligning with our technology-forward operating model. Collectively, this leadership expansion significantly enhances our access to premium global clients, strengthening our front-end engagement capabilities, and improves conversion of high-value opportunities in our framework. As we scale into our next phase of global growth, strengthening leadership across creative, business development, and people strategy remain our key priority. I am also glad to share that we are actively pitching for several high-value marquee projects, including 3 with Netflix and one with MGM Amazon, which are currently at advanced stages of award finalization. On the domestic side, we have appointed an industry veteran as Marketing Head to scale our India sales strategy, which is more catering toward our India domestic market. This is complemented by the onboarding of a seasoned on-set VFX supervisor to strengthen client engagement and execution capabilities within the domestic production ecosystem. From an organizational standpoint, we continue to institutionalize our people strategy. A new CHRO joined in February to drive leadership development, talent scalability, and structured alignment as we grow globally. We have also signed structured partnerships with reputed universities and colleges, including highly reputed SRM and Loyola College in Chennai among others. This initiative enables 52 early career hires and establishes a sustainable cost-efficient talent pipeline, ensuring long-term capacity building while maintaining margin discipline. Now I would like to talk about technology. Technology remains a core pillar of our long-term strategy and during that period we made meaningful progress in building a smarter, more scalable global VFX production platform. Under AI-driven operational intelligence, we have deployed an AI-enabled performance monitoring framework across our studios. This has significantly reduced manual reporting, enabled the data back to production forecast, and introduced real-time productivity tracking within our system. Importantly, it provides granular visibility to team-level metrics, allowing leadership to take faster, more informed decisions and drive delivery precision across projects. On the production side, we have fully implemented Comp UI across the production flow, making it accessible to all the artists. This marks a key step towards building an AI/ML-driven production ecosystem. The platform enables AI-assisted workflows that enhance productivity, improve delivery efficiency, and accelerate creative output. At the same time, it supports structured upskilling of our talent pool, ensuring that our teams remain aligned with the industry's shift towards new technology-enabled working models. In parallel, we strengthened our global infrastructure backbone. For that, we have successfully relocated our London data center to a more cost-efficient facility. And likewise, now as all of you are aware of the sensitivity and scale of the projects we handle, cybersecurity and compliance remain non-negotiable priorities. During this periods we conducted red team exercises and implemented real-time dark web monitoring to proactively identify potential vulnerabilities. These initiatives are now supported by continuous security audits across our systems and meet global security and monitoring standards. We have successfully completed annual certifications and compliance audits for TPN, Apple, and Disney, and we have also received Apple certification as well. These validations reaffirm our adherence to the highest global security and content production standards required by leading studios and streaming platforms. Further, as part of our continuous focus on margin resilience and operational efficiency, we have initiated a cost savings project in which we will make a strategic transition from a fully AWS-based workflow to a hybrid infrastructure model. This transition is currently in progress and is expected to deliver approximately 50% reduction in infrastructure costs upon completion. Importantly, this optimization does not compromise scalability or performance. Instead, it strengthens our cost structure while preserving the flexibility required to handle large-format global productions. We are targeting completion of this transition by July 2026, and we expect it to structurally enhance operating leverage going forward. In summary, this has been a period of visible execution and structural strengthening for the company. We have expanded our global leadership, deepened the client relationships, accelerated technology adoption, optimized our cost structure, and reinforced governance standards, all while maintaining creative excellence and delivery reliability. We are building not just scale, but a resilient, future-ready global platform positioned to capture the next phase of growth in the visual effects industry. We remain confident in our strategic direction and committed to delivering sustainable value to all stakeholders. With that, I would now hand over to Mr. Gaurav Mehra, our CFO, who will walk through the financial performance of the company.

Thank you, Mr. Bala, and good afternoon, everyone. It's a pleasure to connect with you all again today to share our strong business and financial performance consistently for another quarter and YTD results. Before I jump into the numbers, at the outset, I would like to share that we have a robust growth for India stand-alone, both in terms of revenue as well as for margin. We maintain consistency for the consol revenue run rate. We have taken a few bold initiatives required to set strong foundation for better margin trajectory from long-term perspective. I will be talking those all points in detail as we discuss the financial results. I will now share the financial performance for the quarter and the 9 months for FY 2023. I will start with stand-alone financial performance, revenue update. Supported by strong industry revival, India business continued to deliver robust results. The company has delivered Q3 revenue of INR 39 crores and YTD December revenue of INR 94 crores. At YTD level, growth is 2.1x on Y-o-Y basis. Last year, we were at INR 46 crores for the YTD. INR 94 crores YTD December revenue of this year already surpassed full year revenue of last year, which was INR 74 crores by 28%. We expect the momentum to continue for the fourth quarter as well. Margin update. EBITDA margin improved by 11.3% for the quarter and 4.1% for YTD. Current quarter EBITDA margin stands at 42.4% versus 31.1% last year Q3. Current year YTD margin stands at 46.5% versus 42.4% for the last year YTD. PAT margin improved by 16.4% from 10.7% of last year quarter to 27.1% in current year, improved by 16.4% for the quarter and improved by 5.7% for the YTD. Current year PAT YTD margin stands at 29.2% versus 3.5% last year. Margin improvements are led by better volumes due to the increased offshoring and better winning as vendor of first choice. Now I will move to the consolidated financial performance of the group. First, revenue update. Revenue for the quarter stands at INR 105 crores and for the YTD at INR 294 crores, delivering robust growth of 1.7x for YTD on Y-o-Y basis. Last year YTD was INR 169 crores, growth driven by the industry revival and higher. Our winning for FY '26 April to December stands at greater than the INR 300 crores and value yet to be delivered from the order book stands at greater than the INR 200 crores, which is almost 50% of our YTD December annual run rate. Now I will move to the margin update. EBITDA margin shrank by 2.9% for the quarter, 2.8% for YTD. Current year YTD EBITDA margin stand at 19.9% versus 22.7% last year. PAT margin shrank by 4.9% for the quarter, 2.4% for the YTD. Current year PAT YTD margin stand at 11.8% versus 14.2% for last year. Total OCI other comprehensive margin shrank only by the 2.2% for the quarter and 1.8% for YTD. Current year YTD total OCI percentage stands at 13% versus 14.8% for the last year. I would like to take the attention of the investor that how the numbers presentation has changed for us with the fact from current quarter. As you know, after the last fundraise -- after the last QIP fundraise, we are now a main board compliance company. Happy to share that your company transition to the Ind AS conversion smoothly and seamlessly. If you read our last year number, there was not OCI under the IGAAP. So we should compare while comparing the year-over-year comparison, we should compare OCI to the OCI to have apple-to-apple comparison. Margin shrinkage mentioned now is primarily impacted by strategic initiatives to strengthen our global delivery model. Total impact of all irregular items stands at 2.8%. So if I add the irregular items to our 13% OCI, we are better than the last year margin percentages. Initiative details. Ind AS conversion impact, PAT and total OCI impacted by close to 4% to 8% by the Ind AS impact. We do have some other one-off severance costs, which has been linked to the organization restructuring strategy. We did annual appraisal revision, which was on the hold for last 2 years. We onboarded leadership hiring, as Bala mentioned Adrian De Wet, Audrey, Marianne, Theresa. This leadership hiring capability enhance our capability across India and U.K. In total, we have onboarded 4 business development roles and 5 offshore. If I consider this all the initiatives which were not in that -- which has been taken additionally, this all amounts to the impact of 2.8% cumulatively. These actions, while impacting the short-term margins are aimed at structurally improving long-term efficiency and scalability. We will continue to explore more offshoring opportunities within the given legal framework for long-term benefit. I will move on to the offshore expansions and the delivery mix optimization. Parallel to the workforce rationalization in the higher cost regions, we continue to scale our offshore capabilities in India. Happy to share that offshore headcount increased by 58 FTEs. Now I will move to the infrastructure cost optimization. As Bala touched upon in his remarks, as part of our technology-led efficiency initiatives, we are optimizing cloud infrastructure usage and reduce dependency on a fully AWS-based model. This initiative is expected to deliver potential savings to the tune of INR 5 crores to the INR 14 crores as it scale up over a period of the time in the FY '27 and afterwards. Importantly, this transition is designed to preserve scalability and performance while structurally improving our cost base. Now I will move to the geographical revenue mix. Our revenue continued to remain well diversified geographically. North America accounts for 10%, Australia, New Zealand for the 2% and remaining 17% and European contributes to the 71% of the total revenues. Now I will move to the QIP proceeds utilization. As you know, we raised a total fund raise of the INR 85 crores way back in the September 2025. By the time we are talking, we are making the progress for all the objectives. In overall, we have utilized to the tune of the 48% of the total fund raise. We are yet to utilize the funds allocated for the inorganic growth opportunities and very happy to share that M&A is at a very advanced stage of the LOI discussions. I will touch upon briefly on the aged receivable collection update. By the way of the 31st March 2025, our aged receivable greater than 180 days stand at INR 53.05 crore. We have recovered significant amount of approximately 9% of the old receivable by YTD December and have more stronger commitment for the running in the next quarter, but overall debtor outstanding greater than 180 days remain around the old level because of the timing gap. We were get impacted of the lower collections into the month of the December owing to the European holidays. To summarize, we had robust India growth, offshoring picked up the pace, interim costs to be absorbed to deliver increased margin percentage in the years to come. While the quarter reflects planned investment and transition costs, we have taken the decisive steps toward structurally lowering our cost base, increasing our offshore operational leverage, optimizing infrastructure spend, and strengthening our long-term margin resilience. We believe these initiatives will position us well for improved profitability as execution scales over the coming quarter. With that, I now like to open the floor for the questions and answers and thank you, over to you Purvangi.

[Operator Instructions] We'll take our first question from the line of Aniket Madhwani from Steptrade Capital.

So my question was with regards to the numbers. So here, I can see there is a dip in margins at operating level as we compare Y-o-Y or quarter-on-quarter. Could you just clarify the reason behind?

Can you mute your connection, please? There's some background noise.

Thank you for the question, Mr. Aniket. This is Gaurav Mehra. I will take up your question. As I briefly touch upon Mr. Aniket, if you compare, there have been a lot of initiatives taken by the management in the current financial year from the long-term strategy, which caters around the annual appraisal being done after the 2 years, leadership hiring being done to strengthen our business development team, one-off severance cost, which has been incurred to take more offshoring business, and we have also been partially impacted by the Ind AS conversion because of the timing difference. If I consider this all the initiatives, this all will cumulatively sum up close to 2.5% to 2.8% in the total margin. So if you see the total OCI margin for the YTD, we stand at 13%. And if I add back this one-off, I stand at 15.8% versus the 14.8% of the last year. So in fact, operationally, the performance has been better than the last year. But because of this initiative, there is a slight dip of 1.8% at the total OCI level and 5% at the PAT level.

So do we see this be stable in coming quarters?

Absolutely. And in fact, we are also expecting some better winning. As I said briefly mentioned that our winning for the FY '26 stands at a much better level than earlier. We got a new winning of the INR 300 crores, and we stand at the INR 200 crores of the order book to be delivered. So that's positioning us much better position that will offset with the better utilization of the resources with the better rates to win. So we do foresee this as an -- it may be some impact may remain for the coming March quarter. It may not go completely off, but it will be very largely covered by the better utilizations and better rates.

So your outstanding order book would be INR 300 crores plus INR 200 crores, I guess INR 500 crores?

INR 300 crores is the winning that we have from April to December and the outstanding delivery is INR 200 crore, we have this outstanding with us which has to be delivered from our side lately.

Sorry, INR 200 crores will be delivered when, by which year?

INR 200 crores is outstanding yet to be delivered.

And apart from this INR 300 crores, any projects, I mean, are you in talks with or expecting to add in this quarter?

Yes. Out of this win, there are a lot of projects which will be delivered in the running quarter. So when we say that the order book that our winning that pertains for the April till now, yes, so there is a pretty much large delivery, which has been covered up in the running quarter and the upcoming quarter. The large part of the undelivered INR 200 crores Mr. Bala mentioned will be covered from here in the end of the 2026 calendar year. It will be spread across from Jan 2026 till the December 2026, the delivery of the INR 200 crores to be precise.

Okay. And the INR 300 crores will be delivered between April to December, right?

No. So let me just add for clarity around here. So what we are talking that the 2 numbers, we are saying INR 300 crores is the new winning happened from April '25 till December 2025. Out of this new winning, many of the projects have been delivered by now because it's not completely undelivered. So old winning plus the new winning, all put together, we are still left out the INR 200 crores yet to be delivered. That's how it moves. Any order book, there will always be an old order running, there always will be a new winning and the project -- and the delivery will continue. So in the 9 months, we have delivered the INR 300 crores, INR 294 crores to be precise. So that covers some large part of this winning as well.

Okay. So if we consider that out of this INR 200 crores, INR 100 crores will be delivered by March. If that is possible, then should we expect around INR 100 crores top line in this quarter?

It's hard to mention the precise number for such a year by Mr. Aniket. But as I said that we are -- generally, if you see our -- sorry?

I mean, if you can give just a rough idea what number will be?

If you see the current run rate, our current run rate runs at the INR 100 crores, and that's how this -- and we are not far away from the quarter. We are on the track. So I'm saying that we are on the track, and it's heading towards the better winning trajectory and helping to deliver the better higher number. I hope that addresses your question.

Next question is from the line of Viraj Mahadevia from MoneyGrow.

Can you hear me?

Yes.

Bala and Gaurav, thank you for the very detailed introduction. A couple of questions from my side. In your press release, you mentioned 4 high-value projects between Netflix and Amazon. Could you give us an approximate range of what is the value of these total value of 4 projects put together?

Approximately 4 projects, average of $2 million for each project and it goes up to $8 million to $9 million for these 4 projects.

Sorry, Bala, I couldn't hear you very clearly. You said...

$2 million for each project on average. So approximately $8 million to $9 million is what we've been discussing on these projects.

Understood. Helpful. Okay. On the 50% cost reduction that you talk about by July '26, would you be able to maybe elaborate on that a little bit? Where would these savings come from? And what would it result in terms of annual savings on a full year basis?

Sure. And yes, sure to give you an update on -- I think we started working with our team in London. We initially started working on towards AWS. So the team from India used to work completely on cloud, where they will be delivering projects and be accessing any files through completely from cloud earlier. And now we are moving towards a solution where it would be more of a hybrid, which is between cloud and we will have a storage centrally in cloud and we will have all those rendering and processing that would be taken care completely here in India. So this will save the cloud cost and we are estimating for 60 users it can -- at the moment we do have 60 users working in India who are logging into machines in London. And for that it would be effectively between INR 4.5 crores to INR 5 crore of savings, and as when we growing, there would be more considerable savings as well with more users being added into this.

Understood. So this is INR 5 crores of saving annually?

Annually for us 60 users. And likewise, if we are adding 100 users, there would be better much more considerable saving as well likewise as we add.

So to add on that what Bala mentioned, Mr. Viraj, and thank you for that question. So as Mr. Bala mentioned, it's one among the very significant projects what our team is working on for last 1 quarter and it's reaching to a very advanced stage. So as you know, the cloud usage allow the flexibility to operate from anywhere and it helps, but it comes at a higher cost. And you have a low-cost solution on the on-prem, which can help you cost saving, but it comes with a constraint. So team has come up with a very brilliant idea how we can balance the both. So it do not impact the expandability globally, but it optimize the cost. So the number Bala mentioned that is for already identified migration, and it's a continuous process to continue to work. And as per our estimate, it has a potential to increase from INR 5 crores annually to the INR 15 crores as we increase the headcount. So we have already identified the areas where the Bala mentioned the number approximately to be the INR 5 crores, and we are working on the others. As it expands, as the more offshoring happens, it can brew as high as the INR 15 crores and which is kind of you can understand 1% to the 3% of -- 1.5% to 3.5% of our top line revenue uplift into the PAT percentage.

Understood. And when you say this INR 5 crore going to INR 15 crores, is it driven by arbitrage on the headcount? Or is it driven by cost of services like cloud costs, et cetera, that are being managed better? I'm not clear about that piece.

So it's a combination of the both. As more and more users we migrate, it has, then the second part is what part we can do on-prem from the others. So it has different, different parameter and different things what we can. So it's a combination of the both. Even if for the same, I increase the user, it replicates the same saving for the bigger count. And as I expand the scope to cover the more areas, that way also it will give the benefit for both existing as well as the new user.

Understood. Another question I had is there's a INR 14 crore jump in employees cost between -- roughly INR 14 crores between September to December quarter. And you mentioned, I'm assuming this is largely employees, the 4 senior employees, Adrian De Wet, et cetera, that have been hired, plus maybe bulking up team in India with the DNEG employees coming on board. Is now all hiring complete within the ecosystem, India plus overseas to deliver INR 600 crores to INR 800 crores of top line in the next year or 2?

Shall you take up that question, Bala? Sure. So 2 parts to this, Mr. Viraj. First, I will take up that the employee cost increase. So I believe you are referring to the current quarter versus the last quarter wherein...

Absolutely. At console, yes.

...INR 71 crores. So I would say that you should look at it from the 2 perspective. If you see the revenue of the respective period, revenue itself has increased from INR 93.4 crores to INR 105 crores. It's not the same revenue. We should look at the employee as a percentage of the revenue. So in fact, our employee ratio as a percentage of the revenue has improved from previous period of 69.7% to the 66.3%, a significant 3% reduction at an overall level. So -- and that's coming from the offshoring. So while the absolute number may increase, but the percentage is continuously coming down as we do more offshoring and we do the cost optimization. And important to call out that the current year employee benefit include the severance cost and the employee appraisal I mentioned in the earlier remarks. So even after absorbing this, there is a benefit of the 3%. Otherwise, the benefit is even bigger and larger.

Understood. How large was the severance out of U.K.?

It's hard to say the number, but it's sizable. It's sizable. As I said, that all the initiatives which have been taken new and which were not in the corresponding period, it amounts in the range of 2.5% to the 3% on our -- as a percentage of the revenue. It's quite a sizable number.

Understood. Understood. Sorry, you were saying?

No, thank you. And coming back to your other question that whether with the current workforce, we are set with all the hiring, are we equipped to deliver the targeted number? The answer is the all new hiring we talk about, it is not going more towards the operation people to deliver, but it is happening more towards the business development leadership, which help in building the sales funnel and the leader into the operation who drives all the initiatives. As far as the delivery people is concerned, you can see that the last quarter versus this quarter, we mentioned that there is 58 headcount increase. This is entirely happening into the offshore. If you see the on-site, there is a gradual reduction as a part of the severance as well as a part of the offshoring as permissible within the legal framework. So that's the shift happening but not overall, overall wherever it is increasing is more increasing from the offshore location.

Understood. So if I may just paraphrase, please, to fully understand. So you're saying about 58 employees added largely for offshoring delivery centers. And the bulk of the hiring in terms of dollars or rupees has been for BD functions?

Absolutely right.

Which is front-end positions in L.A., U.S., U.K., et cetera.

Absolutely. in the new geographies as well as in our existing geographies, all the creative director, business development, who talks to the production houses who has done its working to build the sales funnel.

To add to what Gaurav mentioned, we are investing more on high-level VFX supervisor and executive producers who would be bringing in more business opportunities in the overseas location. And likewise, we are adding more efficient and proficient artists here in India who would be more appropriate for execution and the operational capabilities from India. So that is where our focus has been for the last quarter.

Understood. Can I ask some more questions or should I get back in queue? Okay. I'll carry on. The status on aged receivables, that is still not something Mr. Mehra that is coming fully under control. This is stretching on now for almost 1.5 years, if not longer, INR 53 crores down to some INR 45 crores. What are we doing to proactively collect this? Because now the industry is in revival mode, the end clients have projects, they have cash flow. Why are they not repaying? And what is really happening there?

So there is a cycle. That's a very fair question, Mr. Viraj. But there is a cycle. If you look out that how the revival is happening, as I mentioned, that revival largely started in the start of this financial year. And when I say the revival started, that revival will start from the production. So there is a cycle of the production, then there is a cycle of the VFX work to be done once the work is being done, then there is an invoicing process, there is a collection process. And because likewise, it was with us wherein it was some aged receivable, even the foreign studios does have some gaps in their working capital. So it's a combination of the both. They are bridging their own needs as well as paying to us in parallel. There has been some deferment to the earlier commitment, which was committed for the last quarter only to the December, large part was the people were not available in the European and all. We do -- but having said that, I would like to take your attention that there is a significant 9% close to 9% to 10% recovery, which has happened, which is a sizable number to the aged ones. Now we are pushing it more. We have the more commitment as you raised the concern, we have also raised a concern, and we are expecting larger parts to come in the current quarter and the following quarter. It's going to take some time, may not be very immediate. But I think in the next 2 quarters, it should address a good amount of the collection over those while the current collection remains at track.

Do any of these age receivables...

Viraj, I request you to join back the queue, please, as we have participants waiting for their turn. Next question is from the line of Surendra Reddy from Chartered Investors Community.

Can you hear me?

Yes, please go ahead.

Yes. Sir, actually, I can see that our current quarterly run rate is going like INR 100 crores. And can we see like any jump in that?

Yes, absolutely. So as I said that generally, if you see the trend, and I will take your attention how the -- our trend is mostly the Q4 quarter is better. Having said that, there will always be, always be down. So we expect the quarter at least at the par or slightly better than the current run rate, which will cover up that. With the higher winning happen in this current financial year, we mentioned that we got a new winning of greater than INR 300 crores, which is really helping us to move the number to the upward trajectory as we enter into the next financial year in the Q1 and so. So we do expect the numbers to improve as the winnings continue to happen. There have been some deferment in the -- I like to call out, there have been some deferment to the projects which were scheduled to the sub on the production houses, but that's part and parcel of the -- our module and work model. There will always be some pluses. There will always be some minuses. It's hard to predict any trend because we are not into the IT where there's a standard monthly billing. It depends upon the production schedule, depends upon the shoot, a lot of things happen. But on a long-run basis, definitely, we expect the growth momentum to continue as the company has delivered over the last past few years.

Got it, sir. One follow-up question on that, sir. Like, I believe that we are working at a subcontractor level. So is there any scaling up to contractor and like doing like a major part of the value chain instead of like smart task?

Sir, if you take the last 2, 3 years, we are 85% to 90% of the work is direct work and only 10 percentage -- 10 to 15 percentage would be of subcontracts. And in that regard, we -- right from pre-visualization to final delivery, we are very much in full -- as in, we have been delivering with the full VFX work for every other project, which we've been working on right for the major networks like Netflix, Amazon, Warner Brothers. If you take any major network, we are participating in all those high-end projects, which have been produced by the production itself.

Yes. Got it, sir. Got it. One last question. Like we have an employee base of 750. So like may know how many people are working under 3D side?

I would say like 65 percentage would be on 3D side. And likewise, the remaining 35 percentage would be 2D side. So it's more of CG AV team and like 2D as well.

We'll take our next question from the line of Pranay Jain from DealWealth Capital.

So with all the strategic initiatives that we've taken and the visibility that we have on the wins and the pipeline, can you please share what is the planned revenue and EBITDA or PAT margin for FY '27 that we are working towards a realistic range. I know that we may overshoot also if things get even better, but what is the planned revenue and EBITDA PAT margin that we have for FY '27?

So Mr. Pranay, we generally do this budgeting exercise in the start of the financial year. So we will be more going into the detail for the next financial year as we close the March to give the better guidance around the number. But on an average, I think our CAGR is in the range of the 25% to 30% CAGR on the top line and our margin continuously improving gradually, which is part and parcel of our offshoring strategy as well as the different cost saving initiatives being taken. So I think we should maintain that CAGR and with the new resources onboarded into the business development, which is a significant investment management has taken the initiative for that should really help to take the number to the next trajectory. We are bidding currently to the volumes and the levels which are far ahead that what we used to do. That's a contribution of the new business development team has joined as well as the industry revival. So we are quite optimistic. Maybe we will share the guidance and we do the next year budgeting exercise.

Mr. Mehra, we are just 5, 6 weeks away from the closure of the financial year. I'm not looking for an exact number that you're aiming. We have a reasonable understanding. In any case, you have indicated 25% kind of CAGR on the revenue should at least be expected. So I will look forward to that. But what can you indicate on the margin? Any range that we can look forward to? Because only optimistic commentary does not help. Hope is not a strategy over here for investors.

No, it's not a strategy. But as you said that in a range, we always target in a year advantage of about, I would say, close to 1.5% to 2% that improving the margin, and it's a combination of the multiple factors as you well understand that cost optimization, the pace, the things happen. So we internally target into the margin improvement in a range of 1.5% to 2%. As I said, while it is a 6 months -- 6 weeks away, I didn't mean that we will be able to close it by the April, it goes in the round. So probably once we come for the May call, when we will be doing the annually, definitely, we will share more insight towards that. But as you rightly picked up, the top line CAGR in the range of 25% and kind of a margin in the range of 1.5% to 2% improvement year-over-year.

Right. And last question, what is the slate of projects to be delivered in the next 3 to 6 months, which we can look forward to hitting the screens. Any color you can give on that?

There are -- again, we've recently worked on Witcher Season 5, which is again currently being screened in Netflix and I think we've been working on and there will be upcoming episodes are coming on Netflix. And likewise, we recently worked on Mission Impossible, which was released quite recently as well. And there are upcoming Disney movie, which is -- which we are working on, which is a big Disney franchise, which I wouldn't be able to name because the movie is yet to be released. So that is the one movie where we've been working on. Sorry that couldn't be able to name, we are not allowed to name the movie before it is released. But we are working on some of high-end films for like for Disney and one high-end TV series for Warner Brothers at this point and that is again one of -- that could be one of potentially a biggest project for Warner Brothers in the last 20 years or so. So that is the kind of project which we are working on. And likewise, apart from that we are also working on few series for Netflix and Amazon as well.

So these big production houses that you just mentioned, are we strained on the receivables front from their side? Or is there some other older production houses and partners who are yet to pay us?

I will take up that question. So as you rightly anticipated that the aged receivables are not from the premium production houses. The aged receivables are more for the India business, wherein we get the subcontracted business from the studios. Our foreign subsidiaries, which get the direct contract with the production also such like Netflix, Disney and all, it's well in that. So if you see that last year, we collected INR 240 crores. This year also, we have collected significant amount, which are all on the track and in the grid. It's not only with us, it's an industry pile up and probably the foreign studios take time. As we mentioned, we need to have some money for their own working capital and gradually paying. And as the demand is up for everyone, they are also recruiting the people. They are also increasing their working capital cycle. So it's a cycle of cost, but it's more pertains to the studios to answer your question, not to those production houses.

[Operator Instructions] We'll take our next question from the line of Praneeth, an individual investor.

So I wanted to understand in terms of -- I understand the legacy receivables are going to happen sooner than later. I was trying to understand when we took over One Of Us, we planned on renegotiating also a few of the payment terms, so we might get it a little earlier. So how are we in that journey at this point?

I will take up that question. So as I mentioned that the receivables are pertaining more to the India business than the one-off related. So because it's with the major studios, it's not from the One Of Us and like that.

I understand that, but I'm curious about the international payment terms and how are they changing after we took over. Because there was some efficiency, we thought we could get from that particular domain, right, in terms of working capital. I was just trying to understand how are we on that journey in terms of reducing receivable days or payment terms? I'm just curious about that.

I think that's pretty much on the track. So as I said, that those production houses, many times we get the sizable signing amount. So those are pretty much on the track to answer you that where our international credit terms lies. So it's in the standard of the 30 days and generally, we get the payment cycle of the 30 max 45 days. So those are all on the track. Even for the India, if you see that our current collections are all on the track. It's the older one, which is coming back in a staggered manner. On the payment term perspective, for the India also, we have the payment term 30 to 45 days. But it does take a cycle of close to 90 days to receive the money considering the work being done, approvals and all the process. So there's some cycle gap from the India business versus the overseas business. We are talking to them to do and they are happy to support all the current receivables on the time and aged on in the staggered manner as I mentioned.

Understood. So just the reason I'm reinforcing is just to understand the progress on what happened from international. Was it higher than 45 days before we took over? Or what was the time then and now it has become 30 to 45. What is that progress right now?

It was a little bit a stretch at that time, but that's a long back because we got integrated way back in the July 2024. So it's kind of -- it's been a long period for those things to get settled by now. So those -- all the things are over. Yes, at the time when we acquired, there was a few cases where it was a stretch, which is now on the routine.

Understood it. Got it. And in terms of...

Mr. Praneeth, I request you to join back the queue, please. Next question is from the line of [ Janeil ], an individual investor.

Am I audible?

Yes.

Yes. So I had a question like what is the onetime cost of the quarter? And can I get the breakup for the same also about the cost?

So I will take up that question. So it's hard to provide that's not the public information available for the breakup, but I have given you the guidance that all the initiatives put together, it ranges in the range of 2.5% to 3% in terms of the impacting the cost.

Okay. But so for -- with the numbers, you cannot provide us with the breakup like with the line item?

That's not a public information.

Next question is from the line of Pankaj, an individual investor.

Am I audible?

Yes.

Okay. I have a quick question continuing the discussion we had on receivables. Can we get a breakup of what is the aging of receivables? I'm more interested in any amounts which are due for more than 6 months? And out of that, is there anything which we are expecting to be kind of written off over a period of time? That's question number one. Question number two is regarding the operating margin dip we are seeing in Q2 to Q3. So we understood the manpower changes, which you kind of just highlighted. Is there anything beyond that also in terms of reduction of those margins?

Sure. So maybe I will answer the last part first before I go to the receivables. So it's not limited to the investment. As I said, that there was a sizable number from the moving from the IGAAP to the Ind AS being with the main board compliances. So that has also been impacted to a sizable percentage. And other than that, as I said, that apart from investing into the new individual, we have given the appraisal after the 2 years. So there have been some impact from that. And also, we have kind of -- those are the major ones which is impacting all put together. This has been partially off compensated as well. So means I'd like to take your attention. There is a cost initiative what we are trying that is also partially offsetting this. But probably the impact of the severance impact of this may be the larger because this initiative we started in the Q2. And as you know, there is a process of a legal notice period and the cost hit at a later part. And the cost savings, what we are talking about, those are just being started. So more benefits to come in the current quarter. So there is a timing gap to that. Coming to your question on the receivable part. So maybe I will say like that. So receivable, it belongs to the -- our existing customer, and it belongs to the customer which still continue the walk. We are still doing the regular walk. It do not pertain to any single customer. It pertains to close to 7 to 8 customers who are with us for more than 6 to 8 years. And as I said, the work continues even now. Coming to that, whether there is any sort of the bad debts, we don't foresee at this point of the time. There happened one instance for a smaller value made back into the Q2, which has been provisioned 100%, which has been part of the published financials. But at this point of the time, other than that, there is no indicator indicating any such sort of the news.

Gaurav, can we give a number for what is the amount which is outstanding for more than 6 months?

As you know, for the quarter, that is the unpublished information. Once we come for the March, definitely, we will be happy to detail that.

Next question is from the line of Praneeth, an individual investor.

So I was trying to understand -- so I see that, our India operation has gone through a huge bump up. So I was just trying to understand how much of the new business was from our resourcing from our international division versus how much was new -- net new order additions?

So I think it's a mix of both. As I said that after the industry revival, we are getting the volume spike up from the existing customer as well as we mentioned that we onboarded 12 new customers, including the 52 happily serving customers. So it's a mix of both. the new as well as the existing one. To give you a flavor, the new one should be contributing in a range of the 15% to 20% in total.

So 15% to 20% of the growth or 15% to 20% of the overall revenue?

I'm saying growth.

Okay. So about -- understood. Got it. So -- and in terms of the resourcing capability, did we reach a peak in terms of what we wanted to resource as a percentage of value of work? Or is there more scope to go forward?

There is more scope to grow forward. And as in we've been recruiting more artist in India as well as in -- for Chennai as well as for Bangalore. And as when we mentioned about hybrid solution which we are integrating in our system currently we have 60 users and we've been waiting to integrate this completely so that way from 60 we are looking to grow that to 150 in Bangalore. And likewise in Chennai and Pune as well we will have similar growth as well over a period of time. And likewise to add to what Gaurav mentioned about the new projects in India and apart from traditional film and TV projects which we've been delivering for clients we've also started a new initiative where we've been delivering production-ready projects which is completely generated out of AI and commercials and ads where we've been delivering for clients for commercials which where we don't have much of a copyright issue and that is why we've been using completely it's more of a hybrid of AI and VFX where we've been delivering product-based commercials to clients as well. So which is again really helped our revenues to grow.

Praneeth, I request you to join back please. Next question is from the line of Pranay Jain from DealWealth Capital.

I wanted to understand the funds that we have raised this year, what is the utilization earmark across key categories and by when we will be infusing it? And by when do you think it will start reflecting into the numbers, the results that we want?

So as we mentioned that out of the total fund raised in an overall, we have utilized close to 48% odd number. And the larger part remain unutilized relates to the inorganic growth opportunity where we are progressing at an advanced stage of discussing the LOI and that's how the utilization looks like.

So what is this inorganic opportunity or the new growth areas that we are looking at? Is it in terms of capability? Is it geography? Is it client set? How are we looking at this?

For this new acquisition, we are looking more at the North American market. And likewise, currently, we are fully covered for traditional VFX as well. What we've been also looking at to cover more into towards experience type market. Experience is what we do see again as a diversified as well as futuristic market as well for us to cover. And where -- on top of that experience some commercials as well as the TV and North American market which we've been trying to cover for our [ MNC capacity ].

How comparable would the unit economics be compared to ours? Is it similar? Is it better?

Sorry could you please come again?

So quite on the size -- maybe I can take up that question. So I think in kind of the revenue, they may be of the size as we did the last acquisition kind of $200 million to $300 million. So there are different prospects what we are evaluating at this point of the time, few are of the larger size, few are of the smaller size. So as I said, we are in a stage of LOI once it gets finalized, we will be happy to share more details with investors.

We'll take our next question from the line of Vishal from Smart Horizon Opportunity Fund.

Am I audible to you?

Yes.

One question for the One Of Us Limited acquisition, which was acquired for expand the global. How quickly we are seeing the actual cross-sell revenue from this acquisition? Can you please quantify the contribution from One Of Us Limited in FY '26?

I'm not clear about the question. May you please repeat?

Can you use the handset mode, please, Vishal.

The question is you acquired acquisition for the One Of Us Limited to expand global footprint. So how quickly we are seeing the actual cross-sell revenue from this acquisition? Can you please quantify the contribution from this acquisition in FY '26?

It's a very significant to detail you. And in fact, it's important to share that this acquisition, they were our customer even before acquisition. So it's a well-known culture and a well-known knowing the entity each other. There is a significant increase into the offshoring business to talk about the cross-sell. It's also helping that whosoever we know they are directly in the contact of the production houses, we are getting some other sorts of the work. To give you the flavor of it, I would say the cross-selling at this point of the time will be in the range of 8% to 10% kind of a range. But the more benefit of the cross-selling is coming from the offshoring because before acquisition, we were one of the vendor for them for offshoring work. Now it's exclusively with us and the offshoring is at a different level. As we mentioned, we are opening the Bengaluru branch, and it's going in a very fast-paced manner. So this all opportunities are coming in my mind as a part of the integration and collaboration opportunities.

Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference back to management for closing comments. Over to you, sir.

Thank you so much. Thank you, everyone, for joining the call, and we really appreciate your time. And if you do have any queries, please do forward it to our IR and PR team, and we would be happy to answer any questions that may come to us. Thank you so much for all.

Thank you, members of the management team. On behalf of Basilic Fly Studio Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.