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Date Submitted: 04/15/2009 12:45 PM
Prime Focus
Shrinath Mithanthaya
Shrinathm@MotilalOswal.com
+ 91 22 39825421
SHAREHOLDING PATTERN
PRIME FOCUS vs SENSEX
(REBASED) SINCE LISTING
Sector Entertainment
Bloomberg PRIF IN
Reuters PRFO.BO
BSE Sensex 14,478
S&P CNX 4,196
Equity Shares (m) 12.7
Face Value (Rs) 10
52-Week Range 428 / 274
1, 6m Rel. Perf. (%) -13, -23
M.Cap. (Rs b) 4.7
Avg. daily volume ('000) 65
Buy 06 February 2007
CMP: Rs367 Target: Rs555 Initiating Coverage
MOSt Mid-caps
© Motilal Oswal Securities Ltd., Hoechst House, 3rd Floor, Nariman Point, Mumbai 400 021 Tel: +91 22 39825500
Y EAR NET SALES PAT EPS EPS ROE ROCE P/ E P/ BV EV / EV /
END (RS M ) ( RS M ) ( RS) Y oY ( %) (%) (%) (X ) (X ) SALES EBITDA
3/06 424 140 13.6 45.8 27.8 27.7 27.0 5.4 9.0 15.7
3/07E 593 211 16.6 22.1 16.3 22.5 22.1 2.5 6.8 11.0
3/08E 831 280 22.0 32.4 14.0 21.5 16.7 2.2 4.9 7.8
3/09E 1,163 412 32.4 47.2 18.1 27.7 11.3 1.9 3.4 5.4
Note: Numbers are for PF India; 55% subsidiary PF UK is valued separately E: MOSt estimates
Prime-time action
Outsourcing of entertainment technology (ET) services is a huge
opportunity for low-cost countries like India. As a global ET player, Prime
Focus (PF) is poised to profitably scale up its business with low risks. We
expect EPS CAGR of 40% through FY09. Our sum-of-parts target price
for PF is Rs555, an upside of 51%. BUY.
Indian ET - the sequel to Indian IT
Outsourcing of ET services is a huge opportunity for low-cost
countries. India is strong on all the key success factors - technology,
talent and tongue (ie, comfort level with English). Indian ET has
the potential to mirror Indian IT, both in terms of revenue growth
and moving up the value chain.
Prime Focus is a global ET player
Prime Focus offers the full range of ET services in India, and has
built strong relationships with both customers and vendors. In May
2006, it acquired VTR Plc, UK. We believe this will help PF get
business given the advantage of (1) UK-based front-end...