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Prime Focus sees capex of USD 15-17m for expansion in FY12

Prime Focus has pegged a capital expenditure of USD 15-17 million in the current fiscal year, mainly towards expanding its operations in India and overseas, in its bid to become a global visual entertainment services company.

June 22, 2011 / 04:25 PM IST
 
 
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Nachiket Kelkar
Moneycontrol.com


Prime Focus has pegged a capital expenditure of USD 15-17 million in the current fiscal year, mainly towards expanding its operations in India and overseas, in its bid to become a global visual entertainment services company.


"We are building three facilities -- New York, London and Mohali (near Chandigarh). So there will be fairly significant amount of capex for that," said managing director Namit Malhotra.


Prime Focus is setting up a facility in London, which will offer visual effects services for film and television clients. It is a new facility, which will be ready by August 2011, he said.


The company is expanding its facility near Chandigarh, which opened in December 2010. The facility currently employs around 730 people, but that is expected to touch three thousand once its fully operational this year, Malhotra said.


The Chandigarh facility is a part of its plans to expand its 2D (two-dimensional) to 3D (three-dimensional) conversion capacity, amid increasing demand for 3D format, especially among Hollywood filmmakers. For instance, in February Prime Focus won a contract from Warner Brothers to convert the film 'Harry Potter and the Deathly Hallows' into 3D.


Malhotra said "the company is seeing a lot of traction in 3D even in India." He believes a fall in price of technology like 3D televisions will aid in strong growth for the format going ahead.


Prime Focus currently has an order book of Rs 350 crore, of which around Rs 250-260 crore is for 2D to 3D conversion. It expects a "steady growth" in order book going ahead.


Prime Focus' consolidated net profit for 2010-11 (April-March) more than doubled year-on-year to Rs 76.09 crore, while net income was up 11.1% to Rs 502.96 crore.  The company officials refused to give a firm guidance, but said "there should be a healthy topline growth."


Currently 35-38% of its revenue comes from US, about 35% from UK and around 30% from India, Malhotra said.

Prime Focus shares were traded up around 3.5% to Rs 50.50 on NSE in noon trade. The shares have fallen 24% since the beginning of 2011.

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