About Identical Brains Studios Limited

Identical Brains Studios is a provider of computer-generated visual effects (“VFX”) services, offering comprehensive suite of VFX services in diverse range of projects such as films, web series, TV series, documentaries, and commercials. The operations are currently from India and the customers include some of the leading film and content producers, including major Bollywood Studios. They transform the imagination, ideas, and words into captivating visual realities. 

Visual Effects or VFX encompasses the creation or manipulation of any imagery that isn't filmed during live-action shooting using techniques, including computer-generated imagery, compositing, and green screens, alongside services like 3D modeling, animation, rotoscoping, pre-visualization, concept art and more. VFX is also used for diverse applications such as architectural visualization and educational content. Key factors driving this expansion include a skilled workforce, competitive pricing, technological advancements, and government support, such as the establishment of the National Centre of Excellence, the National Film Policy focused on the Animation, Gaming, Visual Effects, and Comic landscape, and reimbursements for VFX, animation, and post-production projects. Big-budget productions are allocating 25%-30% of the production costs to VFX, and the success of Indian VFX studios is evident in their contributions to major Hollywood blockbusters such as Avengers: Endgame, The Jungle Book and Life of Pi. The engagement with VFX content is increasing, particularly among younger demographics, with films like Pathaan and Adipurush featuring 3,000 and 4,000 VFX shots, respectively. The integration of emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), Virtual Reality (VR), and Augmented Reality (AR) will enable more efficient workflows while India's animation sector is projected to be driven by evolving demand and shifting consumption patterns, emerging as the second-largest anime fan base and opportunities in adult animation markets.

The company has provided VFX services for films that have achieved significant industry recognition. The portfolio includes upcoming projects like Tanaav 2, Criminal Justice 4, and completed projects include Khel Khel Mein, Murder in Mahim, Bad Cop, The Crew, Article 370, Mission Raniganj, Dream Girl 2, Adipurush, Indian 2, Rocket Boys, Bob Biswas, Kutch Express, Ek Villian Returns, Night Manager, Criminal Justice 3, Phone Bhoot, Satyamev Jayate 2, Angrezi Medium, Scam 1992: The Harshad Mehta Story, Good Newwz, Panipat and many more. Since 2019, the company has provided VFX services for films that has received two Filmfare OTT Awards nominations, one Filmfare Awards nomination, one Dadasaheb Phalke Awards nomination and one FOI Online Awards nomination for Best Visual Effects and has won two Filmfare OTT Awards for Best Visual Effects for Scam 1992: The Harshad Mehta Story (2020) and Rocket Boys (2022) in association with Variate Studios LLP and one Dadasaheb Phalke Awards for Phone Bhoot (2022) for Best Visual Effects.

As on July 31, 2024, Identical Brains Studios team comprises 110 individuals, encompassing a diverse range of roles and expertise, including contracted professional artists. The Bankers to the Company is IndusInd Bank Limited.

Indian Animation Scenario
In 2023, the Indian animation sector faced a challenging year, marked by a contraction in growth due to delays in project timelines and a slowdown in mergers and acquisitions. The decline in the industry was largely influenced by disruptions in the global entertainment sector, including a significant impact from the writers' strike in Hollywood and structural changes within major industry players like Warner Bros. 8 , Discovery, Zee, Sony, and Viacom18. These factors contributed to a noticeable reduction in the number of new Indian animated projects, with fewer releases compared to the previous year. Additionally, major broadcasters experienced a downturn in advertising revenue, further impacting the industry's overall performance.

Despite these challenges, industry leaders are optimistic about a recovery in the upcoming fiscal year. They anticipate a rebound driven by evolving demand and shifting consumption patterns, which are expected to breathe new life into the animation sector. This positive outlook is supported by the growing interest in international markets, as Indian studios increasingly participate in global events and form collaborations in regions such as Russia, Spain, Italy, and the Middle East. This strategic move aims to counteract the slowdown in domestic demand by tapping into new and diverse markets.

Cost-reduction measures implemented by major OTT (over-the-top) platforms also had a significant impact on the volume of animation work outsourced to India. Platforms like Disney+ Hotstar9 and Netflix undertook efficiency initiatives, leading to a reduction in animation projects, with Netflix undergoing restructuring that resulted in job cuts and the cancellation of several animated series.

YouTube continues to dominate as the leading digital platform for animated content in India, accounting for a large portion of children's content consumption. Despite challenges from regulatory changes, studios remain invested in YouTube due to its advanced data analytics capabilities. The trend of urban children favouring digital platforms over television, which remains more popular in rural areas, persisted in 2023. New entrants like JioCinema are expected to further boost digital viewership with a diverse range of content offerings.

The anime segment in India experienced significant growth, with the country emerging as the second-largest anime fan base globally. This rise in popularity has led to increased opportunities in merchandising and licensing, as well as expanded offerings from platforms like JioTV and Prime Video.

The industry is also evolving in terms of content distribution, with new partnerships and multi-platform launches broadening the reach of Indian animated content. Technological advancements, particularly in AI (Artificial Intelligence), Unreal Engine, and cloud computing, are expected to drive efficiency and profitability in animation production. However, the industry faces a talent shortage that has limited the full potential of these technologies.

There are emerging opportunities in the adult animation market, particularly in regions like the US (United States), where demand has surged significantly. Indian studios are also increasingly collaborating with universities and educational institutions to address the talent gap and prepare for the growing complexity of animation work outsourced to the country. The development of cloud-based infrastructure is expected to further support global collaborations, while the creation of globally resonant intellectual properties remains a key focus for the industry.

Overall, while the past year presented significant challenges, the Indian animation sector is poised for recovery and growth soon, with numerous opportunities for innovation and expansion across various segments of the industry.

VFX industry
The Visual Effects (VFX) industry has undergone a phenomenal transformation in recent years. Driven by factors like the surge of streaming services, the ever-growing demand for high-quality content, and the constant technology innovation, VFX has become an indispensable part of filmmaking, television, video games, and even immersive media formats. Market research predicts a significant rise in the global VFX market, with estimates suggesting a growth rate exceeding 10-13% in the coming years. This translates to a booming industry valued in the tens of billions. This global VFX landscape is fuelled by several key trends. Firstly, the rise of streaming giants like Netflix and Disney+10 has created a constant demand for fresh, visually captivating content. Secondly, advancements in CGI (Computer-Generated Imagery) and other VFX tools allow for the creation of increasingly realistic and awe-inspiring visuals. Finally, the rise of virtual production techniques is blurring the lines between filmmaking and post-production, allowing for even more efficient and innovative workflows. The Indian VFX industry has emerged as a major player on the global stage. With its pool of talented artists, competitive pricing, and growing technological expertise, India is attracting a significant chunk of VFX work for Hollywood blockbusters and international productions. This trend is being driven by several factors. Firstly, Indian studios offer highquality VFX services at a more affordable cost compared to traditional VFX hubs like Los Angeles. Secondly, the Indian government's initiatives to promote the media and entertainment sector have created a supportive environment for VFX companies to thrive. Finally, a large pool of skilled artists, coupled with a strong educational system focused on VFX training, ensures a steady stream of talent for the industry.

This growth in the Indian VFX industry not only benefits the domestic film scene but also positions India as a major force in shaping the future of visual effects on a global scale. The collaborative efforts between international studios and Indian VFX houses are pushing the boundaries of what's possible on screen, making movie magic more real than ever before.

Indian Broadcasting and Entertainment Sector
In 2023, the Indian media and entertainment (M&E) sector saw substantial growth, with annual addition of INR 180 billion, the industry size grew to INR 2.32 trillion (USD 27.9 billion), reflecting an 8.4% rise. This growth has propelled the sector to expand at a CAGR of ~6% from INR 1.91 trillion in CY 2019 to INR 2.55 trillion in CY 2024 surpassing pre-pandemic levels, although traditional segments like television, print, and radio are yet to fully recover to their 2019 figures.

While television remains the largest segment, digital media is on track to surpass it by CY 2024, with the overall M&E sector expected to expand at a growth rate of 9.9% from 2.32 trillion in CY 2023 to INR 2.55 trillion by CY 2024 and further expand at a CAGR of ~9.9% from INR 2.32 trillion in CY 2023 to reach INR 3.08 trillion by CY 2026.

A significant driver of this expansion has been the increasing demand for visual effects (VFX), spurred by the rising popularity of Indian films, television shows, and web series. VFX has become an essential component for filmmakers aiming to create visually stunning content, fundamentally reshaping the industry.This growth presents a significant opportunity for India in the global VFX market. With rapid digital transformation, driven by an increasing number of internet users and affordable smartphones, India is well-positioned to become a major player in the VFX industry. The share of new media, including digital platforms and online gaming, grew from 20% in 2019 to 37.7% in 2023, while traditional media's such as Television, Radio, Print media (newspapers, magazines), Cinema share declined from 76% to 57% during the same period. Segments such as online gaming, filmed entertainment, live events, and out-of-home media experienced robust growth, collectively contributing 48% to the sector's overall expansion.

The shift in consumer behaviour towards on-demand and personalized content through streaming platforms has significantly increased the demand for VFX, with more original titles being commissioned. As a result, Indian studios are gaining global recognition, with international production houses increasingly outsourcing VFX work to India due to its cost-effectiveness and high-quality services. This presents a golden opportunity for India to capture a larger share of the global VFX market, driven by its growing capabilities and reputation in this space.

Despite challenges such as piracy, low broadband penetration in rural areas, and rising competition from digital platforms, the Indian broadcasting and entertainment sector is poised for continued expansion. With the rising demand for high-quality visual content, technological advancements, and a supportive market environment, India is well on its way to becoming a key player in the global VFX landscape.

Indian VFX industry
India is rapidly carving a niche for itself as a major player in the global VFX industry with its unique blend of talent, costeffectiveness, and technological expertise. This rise can be attributed to two key factors: the range of services offered by Indian VFX studios and the country's growing prominence as a hub for international film productions.

Several factors have contributed to India's rise as a VFX hub for international productions. Firstly, India boasts a large pool of talented and passionate VFX artists, many graduating from well-established VFX training programs. Indian Media & Entertainment industry to employ over 2 million people, with a significant portion dedicated to VFX. Secondly, Indian studios offer their services at a competitive cost compared to traditional VFX hubs like Los Angeles. This cost advantage, coupled with the high quality of work produced, makes India an attractive destination for studios worldwide. Furthermore, the Indian government has actively supported the growth of the media and entertainment sector, creating a supportive environment for VFX companies to thrive. This includes initiatives like establishing centers of excellence for animation and VFX education and offering tax breaks for VFX work done in India.

The global VFX market is expected to experience significant growth, with its size projected to increase from USD 84.5 billion in 2024 (estimated) to USD 184.5 billion in 2030. The Indian VFX market currently accounts for a miniscule share of less than 1% in the global VFX space. However, India is making a rapid progress and is expected to benefit from the increasing global VFX market. India’s VFX market is estimated to grow at 15.8% CAGR between CY 2024-2030 against global VFX market projected CAGR of 13.9% between CY 2024-2030 with its share expected to grow to above 1% by 2030.

The Indian VFX industry is experiencing a phenomenal growth spurt, witnessing a surge in market revenue over the past few years. The market has grown exponentially, from USD 107.7 million in CY 2020 to USD 647.2 million in CY 2023, reflecting an impressive CAGR of approximately 81.8%. This translates to a staggering growth rate exceeding 500% in just three years. This remarkable rise signifies a thriving domestic market and a growing global presence for Indian VFX studios.

Firstly, the Indian government's initiatives to promote the media and entertainment sector have created a supportive environment for VFX companies to thrive. Tax breaks, infrastructure development, and support for skill development programs have nurtured the growth of a domestic talent pool. A National Film Policy has been established, with a focus on harnessing the potential of the animation segment. This suggests a recognition of animation's importance within the broader AVGC (Animation, Visual Effect, Gaming, and Comic) landscape.

The government has committed to setting up a National Centre of Excellence for Animation, Gaming, Visual Effects and Comics in Mumbai. This centre will likely provide crucial training, resources, and infrastructure to nurture talent across all these creative sectors. To further incentivize growth, the government has unveiled a financial program offering reimbursements for VFX, animation, and post-production projects. Studios can receive up to 30% back on a minimum spend, with an additional 5% bonus for projects that incorporate significant Indian content. This financial support makes it more attractive for studios to utilize Indian services for their projects, further boosting the domestic industry.

Secondly, India boasts a large pool of skilled and well-trained VFX artists. Educational programs focused on VFX are flourishing, ensuring a steady stream of talent to meet the ever-increasing demand. This skilled workforce, coupled with competitive pricing compared to traditional VFX hubs, makes Indian studios an attractive option for international productions.

Thirdly, the surge in demand for high-quality content from streaming services like Netflix and Disney+ has benefitted the Indian VFX industry. As these platforms churn out new shows and movies, Indian studios are well-positioned to contribute their expertise in creating visually captivating content.

The Indian VFX industry's growth isn't limited to just domestic projects. With its competitive edge and growing talent pool, India is actively collaborating with Hollywood studios on major blockbusters. This collaborative approach is pushing the boundaries of visual effects and solidifying India's position as a prominent player in the global VFX market.

The movie segment reigns supreme, contributing a significant USD 256.9 million, or 39.7% of the total VFX market revenue in India for CY 2023. This dominance reflects the growing popularity of visually spectacular Indian cinema, particularly within genres like action, fantasy, and sci-fi.Studios are increasingly relying on VFX to create larger-than-life experiences and enhance storytelling, leading to a high demand for skilled VFX artists specifically focused on movie production.

The dominance of the movie segment in the Indian VFX industry is directly linked to the recent resurgence of Indian cinema. With a staggering 157.4 million people attending movies in 2023, a 29% increase compared to the previous year and exceeding pre-pandemic levels by 8%, there's a clear audience hunger for visually captivating experiences. This renewed interest in cinema is fuelling a significant rise in VFX budgets for Indian films.

Big-budget productions like "Brahmastra" and "RRR" are allocating a whopping 25-30% of their production costs to VFX, a testament to the growing importance of visual effects in contemporary Indian cinema.This trend perfectly aligns with the movie segment contribution capturing a significant 39.7% share of the total VFX market revenue in India for CY 2023. As audiences demand more immersive and visually spectacular experiences, Indian filmmakers are strategically utilizing VFX to enhance storytelling, create larger-than-life visuals, and ultimately, draw viewers back to the theatres. This flourishing collaboration between filmmakers and the VFX industry is propelling the movie segment to the forefront of the Indian VFX market and shaping the future of visual storytelling in Indian cinema.

Following closely behind is the television segment, with a revenue contribution of USD 178.6 million, translating to 27.6% of the total market share. The rise of streaming platforms and high-budget television shows in India is driving the demand for VFX in this sector.Television shows are leveraging VFX to create visually captivating narratives, compete with global content, and attract viewers in a crowded entertainment landscape.

The gaming segment emerges as a strong contender, contributing USD 114.6 million, or 17.7% of the market share. The Indian mobile gaming industry is experiencing explosive growth, and developers are turning to VFX to create immersive and visually stunning gaming experiences. This trend is expected to continue as the gaming industry matures and the demand for high-fidelity games soars.

Advertising takes a respectable share of the market with USD 68.6 million and 10.6% contribution.Advertisers are leveraging VFX to create visually stunning commercials that grab viewers' attention and leave a lasting impression, especially in a competitive advertising environment.

Finally, the "Others" segment, encompassing a diverse range of applications such as architectural visualizations and educational content, contributed USD 28.5 million, representing 4.4% of the total market share.

India's VFX industry has undergone a remarkable transformation, expanding far beyond its initial confines of a few metropolitan cities. Once predominantly concentrated in Mumbai, Bengaluru, Pune, Hyderabad, Chennai, and Kochi, the industry has witnessed a prolific growth spurt, with studios mushrooming across the country. Mumbai continues to reign supreme as the VFX hub, boasting an impressive 600 to 700 studios. Bengaluru follows closely with around 500 studios, while Hyderabad and Pune each accommodate a substantial 300 to 400. Chennai houses approximately 300 studios, while Noida and Gurgaon have established a foothold with 150 studios apiece. Kolkata and Indore contribute with 100 studios each, and the industry's footprint extends further to Bhopal, Ahmedabad, and Kochi. This decentralized growth is further accentuated by the emergence of studios in smaller towns, signaling a democratization of the VFX sector and tapping into a wider pool of talent and resources.

The Indian animation and VFX industry have been experiencing significant growth, with the VFX segment playing a substantial role in this expansion. The demand for VFX content is on the rise, driven by its increasing incorporation in films, OTT platforms, and advertising. This trend reflects a robust growth trajectory as VFX continues to gain prominence in various media formats.

Several factors are driving the growth of VFX content viewership in India. There is a rising global demand for high-quality visuals, accompanied by the continuous expansion of digital streaming platforms. Domestic productions are increasingly incorporating advanced VFX techniques, contributing significantly to this growth trend. Additionally, the cost-effective nature of VFX services makes it an attractive option for filmmakers and content creators looking to enhance their storytelling with visually captivating elements.

Trends indicate that audience engagement with VFX content is increasing, particularly among younger demographics such as Gen Z (Generation Z or Zoomers) and Millennials, who favour on-demand content available through streaming platforms. Films with high VFX elements, have seen substantial increases in viewership, showcasing the demand for visually captivating storytelling. While the growth outlook is promising, challenges such as piracy, limited broadband penetration in rural areas, and increasing competition from digital platforms could impact future growth. Despite these challenges, the overall trajectory remains positive, with expectations for continued expansion in viewership and production quality fuelled by advancements in technology and increasing investment in VFX across various media.

The landscape of Indian cinema is undergoing a significant transformation, with VFX adoption becoming increasingly prevalent across theatrical and OTT releases. Starting with a moderate number of shots (1,150-1,575) in films like "Jaane Jaan," "Selfie," "Rocky Rani ki Prem Kahani," "Rana Naidu," and "The Village," the data reveals a clear upward trajectory. This suggests a growing comfort level with incorporating VFX into the filmmaking process. However, the figures for "Pathaan" (3,000 VFX shots) and "Adipurush" (4,000 VFX shots) showcase a significant leap. These numbers suggest a paradigm shift towards VFX-heavy productions in Indian cinema.

The Indian streaming landscape is witnessing a paradigm shift in the adoption of VFX. Previously, budget constraints often limited the use of visual effects in web series and online content. However, a confluence of factors is driving streaming platforms to embrace VFX with increasing openness and expanding budgets.

Firstly, the growing popularity of Indian streaming platforms has fueled competition for viewers. Platforms like Netflix, Disney+ Hotstar, and Amazon Prime Video are vying for audience attention with a constant stream of original content.To stand out, these platforms are recognizing the power of visually captivating content.VFX can elevate the production value of web series, allowing for the creation of immersive worlds, fantastical creatures, and visually stunning action sequences. This enhanced visual spectacle helps these shows compete with global content and attract a wider audience base.

With the promise of wider viewership and lucrative deals, Indian streaming platforms are increasingly greenlighting projects with larger budgets dedicated to VFX. This has led to a growing demand for skilled VFX artists and studios within the country. Recognizing this opportunity, several VFX studios have sprouted up in India, catering specifically to the needs of streaming platforms. These studios offer competitive pricing while maintaining high-quality standards, making them an attractive option for platforms looking to stretch their production budgets further.

This influx of streaming platforms and the rise of domestic VFX studios have created a positive feedback loop. Streaming platforms are driving the demand for VFX-heavy content, leading to the growth of VFX studios. In turn, these studios are providing the expertise and resources necessary to create visually stunning content that keeps viewers glued to their screens. This collaborative environment is fostering innovation and pushing the boundaries of VFX in Indian streaming productions.

Secondly, the success of VFX-heavy Indian web series has demonstrated its potential to drive viewership.Shows like "The Family Man" (Amazon Prime Video) and "Sacred Games" (Netflix) have garnered critical acclaim and audience praise for their exceptional use of VFX.This success story underscores the power of VFX in creating compelling narratives that resonate with viewers, ultimately leading to higher subscription rates and platform loyalty.

Thirdly, the Indian VFX industry's growth and competitive pricing make it an attractive option for streaming platforms.The availability of skilled VFX artists and studios offering high-quality services at reasonable costs allows platforms to invest in visual effects without breaking the bank. This accessibility empowers streaming services to experiment with VFX and explore its potential in a cost-effective manner.

Finally, the evolving tastes of Indian audiences are playing a crucial role. As viewers become accustomed to the high production values and stunning visuals of global streaming content, their expectations for Indian web series are rising.Streaming platforms are responding to this demand by allocating larger budgets to VFX, allowing for a more visually polished and immersive viewing experience.

The demand and supply dynamics of VFX content in India reflect the industry's rapid growth and transformation. As the entertainment landscape continues to evolve, both the demand for and supply of VFX content have witnessed significant changes driven by various factors.

The demand for VFX content in India is primarily driven by the burgeoning entertainment sector, which includes films, television, and the increasingly popular OTT platforms. Indian audiences are showing a strong preference for high-quality, visually appealing content, leading filmmakers, and content creators to incorporate advanced VFX techniques into their projects. This demand is further fuelled by the success of visually stunning films.

In addition to the film industry, other sectors such as advertising, gaming, and virtual reality are increasingly utilizing VFX to enhance the user experience. The global reach of Indian content has also spurred demand, with international audiences appreciating the quality and creativity of Indian VFX work. As digital consumption continues to rise, the demand for VFX content is expected to grow, particularly among younger audiences who favour on-demand and interactive content.

India has emerged as a significant hub for VFX production, with numerous studios providing high-quality services at competitive prices. The country's VFX industry benefits from a large pool of talented artists and technicians skilled in the latest technologies. Indian studios are not only catering to domestic demand but are also attracting international projects, thanks to their reputation for delivering cost-effective and innovative VFX solutions.

The growth of the VFX industry is supported by various government initiatives aimed at boosting the animation and VFX sector. Initiatives such as the National Centre of Excellence for Animation, Visual Effects, Gaming, and Comics (NCoE) and the Make in India campaign have encouraged investment in infrastructure and skill development, further enhancing the supply capabilities of the industry.

While the demand for VFX content continues to rise, the industry faces challenges in balancing supply. The rapid pace of technological advancement requires continuous upskilling of the workforce to meet the evolving demands of the market. Additionally, issues such as piracy and limited access to advanced technologies in certain regions can impact the supply chain.

Despite these challenges, the Indian VFX industry is well-positioned to meet the growing demand for high-quality content. With ongoing investments in technology, talent development, and infrastructure, the industry is poised to continue its upward trajectory, solidifying India's position as a global leader in VFX production. The balance between demand and supply is expected to stabilize as the industry matures, driven by innovation and a commitment to excellence in visual storytelling.

The Indian VFX industry is poised for a remarkable trajectory, with market revenue expected to surge in the coming years. The market is projected to nearly triple in size, jumping from USD 647 million in CY 2023 to a staggering USD 1,823 million by CY 2030. This translates to a CAGR exceeding 15.9%, signifying a booming industry fuelled by several key factors.

India's burgeoning middle class boasts a growing disposable income, leading to increased spending on entertainment experiences. This translates to a higher demand for visually captivating content, propelling the demand for VFX-heavy films, television shows, and video games within the domestic market. The Indian OTT market is experiencing explosive growth, with platforms like Netflix and Disney+ Hotstar vying for viewers. These platforms require a steady stream of high-quality, visually engaging content to compete effectively.Indian VFX studios can cater to this demand by creating visually stunning experiences for domestic audiences, further fuelling market growth.

One major driver is the ongoing resurgence of the Indian film industry. As moviegoing flourishes and audiences demand visually spectacular experiences, filmmakers are increasingly relying on VFX to create captivating narratives and largerthan-life visuals. This spurs a continuous rise in VFX budgets for Indian films, further propelling the VFX industry. Regional language cinema in India is also experiencing a renaissance.Filmmakers are increasingly utilizing VFX to enhance storytelling and create visually spectacular experiences that resonate with regional audiences. This trend is expected to continue, propelling the demand for VFX talent and expertise catered to diverse regional markets.

Beyond domestic productions, India's VFX prowess is attracting international collaborations. Studios are drawn to India's competitive pricing, skilled workforce, and government support for the industry. This collaborative approach with Hollywood and other international players exposes Indian VFX studios to cutting-edge technologies and workflows, further enhancing their capabilities.

The growth story extends beyond movies. The Indian gaming industry is experiencing explosive growth, and VFX plays a crucial role in crafting immersive gaming experiences. The rise of streaming services also fuels demand for VFX-laden television shows and web series. These factors, coupled with the potential of emerging technologies like virtual reality and augmented reality, create a diverse landscape for future VFX growth.

The Indian government also plays a significant role. Initiatives like the National Film Policy and the National Centre of Excellence for Animation, Gaming, Visual Effects and Comics aim to nurture talent, provide infrastructure, and incentivize studios to utilize Indian VFX services. This government support creates a favorable environment for the industry to flourish.

The Indian VFX industry is not a monolithic entity, but rather a dynamic ecosystem with a fragmented structure. Numerous studios, both large and small, compete for a share of the market. This fragmentation fosters innovation as studios specialize in certain niches or cater to specific budget ranges. However, collaboration is also a key aspect of the competitive landscape. Studios often partner on large projects, leveraging each other's strengths and expertise.

Several key factors shape competition in this dynamic market. Talent availability is crucial, with studios vying for skilled artists across various VFX specializations. Studios also compete on the basis of pricing, with India offering a cost-effective advantage compared to established VFX hubs. Additionally, the ability to deliver high-quality work consistently and meet tight deadlines is essential for attracting and retaining clients.

The competitive landscape is further intensified by the presence of global VFX giants. Companies like Weta Digital (New Zealand), Framestore (France), and Industrial Light & Magic (USA) possess immense resources, experience, and a proven track record of delivering cutting-edge visual effects. These studios often compete for major Hollywood blockbusters, but they may also collaborate with Indian studios on specific projects, leveraging India's cost advantage and talent pool.

However, Indian VFX studios are not merely subcontractors. Domestic players like, Prime Focus, Digikore Studios and DNEG India are carving their niche in the global market. These studios are actively involved in major Hollywood productions, contributing their expertise to films like Dune and The Jungle Book. Additionally, they cater to the growing demand for VFX within the Indian film industry itself.

The fragmented structure of the Indian VFX industry, coupled with the presence of both global giants and domestic players, creates a competitive yet collaborative environment. This fosters innovation, cost-effectiveness, and a skilled workforce, all of which are crucial for the Indian VFX industry to maintain its edge and solidify its position as a major player on the global stage.

The VFX industry displays a varied performance landscape, characterized by differences in growth, profitability, and financial stability among its key players Prime Focus Limited, Phantom Digital Effects Limited and Digikore Studios Limited. Prime Focus has encountered substantial revenue decline, pointing to potential operational or market challenges and faced sharp deteriorations in profitability, indicating severe financial distress or ongoing restructuring needs.

The sector has exhibited robust growth trends, with consistently increasing revenues and improving profitability metrics. Enhanced EBITDA and PAT margins in these companies reflect effective cost management and successful revenue generation strategies. Although there has been some decline in return on assets (ROA) and return on capital employed (ROCE) in recent years, these firms still show strong performance compared to their peers, suggesting efficient asset and capital utilization.

Additionally, there are companies demonstrating positive performance with steady revenue growth and improved profitability, albeit at a slower pace compared to the high-growth segment. The positive trajectory in profitability is a favourable sign, but the growth rates vary significantly across the sector. Financial stability among these companies also varies; some maintain a stable net worth and low debt-equity ratios, indicating financial resilience despite performance issues, while others display a growing net worth and conservative debt management, reflecting strong financial positions. Overall, the VFX industry holds promising growth potential, particularly for companies’ adept at managing operational and financial challenges. While some players are capitalizing on growth and profitability, others face significant hurdles that require strategic interventions to fully leverage the sector's opportunities.

IDENTICAL BRAINS STUDIOS LIMITED COMPETITIVE STRENGTH
1. Integrated and highly scalable service delivery capabilities
2. Reputation as a trusted provider of VFX Services with established relationships throughout the Entertainment Industry
3. Attractive business model, with significant revenue visibility and compelling opportunities for long-term margin expansion and cash flow generation
4. Experienced management team with managerial, creative and technical expertise and industry relationships

IDENTICAL BRAINS STUDIOS LIMITED GROWTH STRATEGIES
1. Establish Colour Grading Digital Intermediate (“DI”) and Sound Studio Set up
2. Pursue emerging content media and strategically increase scale
3. Investment in technologies, infrastructure and facilities
4. Maintain creative, technical and managerial leadership by leveraging the brand and reputation to recruit leading talent
5. Expand their VFX services offering to film and content producers in new, high-growth geographic markets

IDENTICAL BRAINS STUDIOS LIMITED RISK FACTORS & CONCERNS
1. They depend upon their relationships with the major Bollywood studios, including key executive and creative talent
2. If the film and content producers reduce the amount of VFX content they produce and release, the company’s revenue would likely decline.
3. Recent and planned acquisitions among film and content producers, may reduce the breadth of their customer base, and could result in a narrower market for their services, increase competition and reduce negotiating leverage.
4. They secure contracts from both film and content producers and through subcontracting arrangements.
5. From time-to-time studios have sought to defer part of their fees for services until after a film is released.