My view is this red flag news is known to market already and is 6 months old, the SMEs has fair share of such issues during initial phases( more concerned if repeated) and they have learning process to deal correctly like Investors during this phase and generally are guided by Investor relations team.
Also, market is forward looking and acquisition is doing well with customer likes Netflix, Amazon, 30 day payment cycle, concall commentary was positive and record Bid pipeline looks promising
PhantomFX Confirms Business Continuity Amid U.S. Tariff
Proposal on Foreign Films
Mumbai, October 2, 2025 – Phantom Digital Effects Limited, one of India’s fastest-growing visual
effects studios with a global client base, has reaffirmed that its business model remains immune to the
United States proposed 100% tariff on films produced outside the country, following President Donald
Trump’s announcement on September 30.
The proposal has stirred uncertainty across Hollywood, where international shoots form a large share
of big-budget productions. The U.S. film sector itself records an annual export surplus of $22.6 billion,
raising doubts about the practicality of such measures.
Why PhantomFX is Insulated:
VFX classified as services – Visual effects are legally treated as IT and post-production services,
not film production or imported goods, keeping them outside tariff scope.
U.S. anchor via Tippett Studio – Based in Berkeley, CA, the studio allows PhantomFX to
originate and bill projects from within the U.S. while executing work globally.
Canadian billing reduces exposure – Less than 10% of Tippett’s business involves direct U.S.
billing, as many clients have shifted to Canadian production structures, limiting PhantomFX’s
tariff exposure.
Diversified delivery hubs – With strong operations across India, the UK, Europe, and Asia,
PhantomFX avoids overexposure to any single geography.
Hybrid model built for resilience – The company’s “U.S. front-end, global back-end” system
ensures cost efficiency and compliance even in volatile trade environments.
Proven resilience during industry shocks – PhantomFX maintained a robust pipeline and
profitability during recent Hollywood strikes, underscoring its ability to withstand disruptions
in the U.S. market.
Executives confirmed that no adjustments are needed in current workflows.
“Global cinema continues to demand high-quality, high-volume visual effects.
Our operations, along with Tippet Studios, are structured to remain resilient to
policy shifts, and since VFX services are creative contracts—not imports of
physical goods—the proposed tariffs do not affect our value chain,” said Mr.
Bejoy Arputharaj Sam Manohar, Chairman & Managing Director of PhantomFX.
Industry Viewpoint
Analysts argue that implementing a sweeping 100% tariff would be complex and potentially selfdefeating for U.S. studios, many of which rely on offshore production while retaining American
distribution revenues.
Outlook
PhantomFX confirmed that its project pipeline and long-term growth strategies remain intact, with
global demand for advanced visual effects expected to grow at double-digit rates. The company
emphasized that no operational or financial changes are required, as its U.S. presence, Canadian billing
structure, and globally distributed execution network provide strategic flexibility under any policy
outcome—making the tariff debate a policy issue to monitor rather than an operational threat.
Annual report for FY24-25 mentions Employee Benefit Expenses at 189.41Cr at consolidated level, jump from 29.45 Cr for FY23-24. Standalone, its a Y-o-Y decline to 22.07Cr from 29.09Cr in FY24
Mapping Trajectory for number of employees : 341 (FY23) → 480 (FY24) → 382 (FY25)
Mapping Median Salary : 3.33L (FY23) → 5.2L (FY24) (Missing in FY25 report)
Mapping Employee benefit expense : 12.49Cr (FY22) → 17.56Cr (FY23) → 29.45Cr(FY24) → 189.41Cr (FY25)
No ESOPs have been exercised either
with no material increase in employee count (in fact a decrease ), no ESOP exercise, no disclosed bump in KMP renumeration - I am left wandering where has this expense gone? I am unable to come up with an explanation for the same. Experienced members please pitch in with your opinions. Do you smell something fishy?
GPT helped me realise that they also disclose a strength of “team Members” in one of the infographic images, which has jumped from 450+ in last AR to 800+ in current AR. A large chunk of this probably people working for the “One of Us” acquisition in EU. Since median salaries there are at least 5x of what they’ll pay in India, the huge jump in EBE maybe explained
Apparently the “382” figure in my previous post is permanent employees count. Strange, hard to digest this kind of reporting, but this is the only thing that could explain the discrepancy, assuming honest accounting
