Phantom Digital Effects Limited

Have seen a lot of extremely stupid and obstinate opinions going around on twitter that AI will kill these companies. Reminds me recent opinions in aftermath of chatGPT that it will eradicate software engineers. Laughable at best. If this causes a slow decline in stock price, I would be very interested.

Movies are an art medium. A slightly different direction angle angle, tone, color , background makes all the difference in the world. People go to theatres to watch movies. This is not about generating a low quality YouTube video.

I am a software engineer so I don’t have credentials but agathodaemon does. And I second him.

3 Likes

VFX is a type of knowledge work. Generative AI revolution will impact all knowledge work. Each engineer/VFX artist’s productivity goes up 10x, thought another way, companies either need 10x lower engineers or need to do 10x more output to justify having that many engineers/VFX artists. Think about it from any company’s perspective. They would try to leverage existing staff for higher/faster growth. Execution times would go down. More movies would release every year.

But the most likely outcome is something in middle, each engineer/artist does 3x more work but companies need 3x fewer engineers/artists. This is going to be hugely disruptive. At same time, the need for a VFX company does not go away. Rather, VFX becomes central to the movie. Rather than VFX being a way to enhance a movie, each movie would become an animation movie with reality level graphics in each movie. Most large tech studios would want to build these capabilities in-house, the likes of disney, marvel, DC. Even red chilli entertainment would build this capability in-house using red chilli VFX. But just imagine, would each production house be in a position to do same. Is it the core competence for production houses like KJR, Karan johar, yash raj to deploy cutting edge AI/ML technologies? I dont think it is. The question of what to outsource & what to do in-house would critically define different types of production houses.

Two things are for sure imo:

  1. Entry barrier for long format entertainment targetted creative videos goes down dramatically. we would have an explosion of movies & long format videos. You could make a movie, i could make a movie, each of us could create our own production houses, create movies with generative AI & distribute it on YouTube.
  2. Imagine yash raj studios licensing SRK’s digital avatar for 50 cr & then spending about 10cr on VFX and boom they have a 60cr pre-distribution SRK movie made. No more fancy shooting locations, no more studios, everything is rendered from the script as video by GenAI models.

Disclaimer: recently sold out, following balance sheet deterioration in Sep-23 but watching this space very closely. (management didnt walk the talk on other current asset & receivables reduction).

21 Likes

A VFX Engineer take on Generative AI [Starts at 59:00]

1 Like

On technical front, it seems to be forming a base.
Can become strong once give closing above 480 on DTF. Looking like it should move up, can be a trap as well. Stop loss of closing below 200 DMA

2 Likes


Seems they have raised the amount to 80 crores instead of 60.
Thoughts on this?
Disc- Invested, 6.5% of my portfolio.

1 Like

Phantom Digitals QIP -

11 Likes

Funds will be used for developing new technologies and for to start the journey in gaming & animation space.

I see this development as big strategic move with respect to longevity of the business, If they execute it well In that case the combination of vfx in OTT & movies along with gaming & animation will be deadly.

Disclaimer- Invested & Biased and having conviction on the promoters.

9 Likes

Don’t think PhantomFX will get involved itself in distribution as it has no competency at all in that space. Its the other producers or large distributors who will take a call… Also, from what i know it is getting released in the super busy Pongal/Sankranthi season with lot of competition from other movies. So, while they continue to release the movie during Pongal in Tamilnadu, they have opted to postpone their release in other languages- in Telugu, they have postponed the theatrical release to the subsequent weeks. Not sure about Kannada though.

1 Like

Ayalaan is available for booking in most of the multiplexes and theatres in Bangalore and Chennai via Bookmyshow. In the earlier thread(deleted now), it was too early to check.

2 Likes

https://in.bookmyshow.com/buytickets/ayalaan-bengaluru/movie-bang-ET00311489-MT/20240112

Going to watch over the weekends.

3 Likes


Hi, newbie investor here. Can anyone please explain what this notification means? Will they continue to be listed on SME Platform?
Another question I had was how long the company stays in SME platform normally before it gets listed on Main board?
Is it something that Board decides or the company?
Sorry for asking basic doubts.
Disc- invested, 6.4% of portfolio.

https://www.valueresearchonline.com/stories/48964/what-is-the-sme-exchange-should-you-invest-in-companies-listed-on-it/

https://static.nseindia.com/s3fs-public/2023-05/PR_cc_20042023.pdf

This press release above basically gives 2 conditions for migrating from NSE/BSE SME exchange to main board , which are as below:

  1. It should have a net worth of minimum 50 crores.
  2. It should have been listed on the exchanges for a minimum of 3 years

Also posting a link for some early reviews for the film

5 Likes

Add one more point based on 27.11.2023 concall:
Question: you said that you are looking for inorganic opportunities.
So, can I know what are your specific criteria for the companies which you are looking for? And also, are you looking for opportunities in India itself or any other foreign companies like Canada, US or Europe?

Answer : We are looking at acquisitions. As of now, we have brokered a deal with a couple of companies. So, the fund that we are raising will be going towards that as well. So, right now, I am not in a liberty to reveal who they are. Once the deal is sealed off, I will probably reveal it. But that is for sure going to add more value to the brand because these are two different new verticals, not into VFX. So, this is definitely going to add value to what Phantom has built over the years and this is definitely going to build the very big – create a very big wave in the market.

8 Likes

I did watch Ayalaan movie on Friday. Overall occupancy was around 20%(morning show). It was released without much publicity compared to other big tamil( captain miller) and telugu( gunturu kaaram) movies released on the same day for Sankranthi. First half was impressive but second half turns out to be average. Overall I think it is getting getting good word of mouth publicity reflecting in better occupancy over weekend. If we look at the no of ticket sold it is at par with other tamil movie like captain miller.

Phantom has done good work with VFX effects in the movie.

Looks like movie will be released in Hindi in near future.

Disclosure: Invested

1 Like

2 days collection about to reach 20cr, with hindi and telugu release atleast it should get the good response.

1 Like

What I wanted to ask was didn’t Phantom sell the rights of the movie for a specified amount? I guess it was 19 crores?
So whatever additional the movie makes, phantom won’t get a piece of it?
Would be great if someone clear my doubts, thank you.
Disc- Invested, 6.37% of portfolio.

They have paid 17cr for the distribution rights, We don’t know in how much they have sold the distribution rights (overseas & domestic).

Usually in co-production business the profit share is 8-10%

Disc- Invested

1 Like

Dr. Rohit ji…Phantom digital has acquired Distribution rights at 17 Cr for Overseas territory…These rights are sold to “Hamsini Entertainment” who further sold it to other country specific distributors barring USA

Coming to your question on will Phantom digital receive any profit share from collections too.

Since the deal is on a “Minimum Guarantee / MG” basis, we need to understand little bit on this type of deal. The MG deal comprises of two parts.

  • Part A, is the initial amount along with the profit percentage which the seller/ Phantom would seek and to be paid in total before movie release.

  • Part B, is basis the actual collections for that territory. In our case it will be basis “Overseas territory” collections only. Profit is shared if the collections for this territory cross certain threshold limit

Generally, MG deal is done to minimise the risk between the buyer and seller.

On Part A collection…During EGM meeting for QIP, Bejoy / CFO mentioned that they had already received 50% amount and the remaining amount will be received before movie release. Since the movie is already released we can assume that they would have got 100% payment by now.

On Part B collection and profit sharing… movie has got a good talk especially VFX portion…it is running successfully all across, with collections increasing day by day…even today 15th being a holiday in TN and I guess in USA too collections are increasing compared to Sunday… 16th TN collections will be high again as most of the theatres are already sold out or fast filling and more shows getting added but Overseas would drop and pick again in weekend

My view is that Phantom digital wasn’t looking to make huge profits out of it as their main intention was to showcase their VFX capabilities to the world, but the project got into financial trouble as one of the producer (24AM Studios) moved out and Phantom got in to support other producer (KJR Studios) from financial challenges so that the movie gets released and they will be able showcase their work…I guess they have achieved what they wanted with flying colours, the feedback on VFX is highly positive all across and is also acting as a strong contributor to overall movie’s success

Having said that, at this stage we don’t know the profit margin for part A and threshold limit plus profit sharing percentage for part B

I believe Phantom would not have sold it at cost for sure…for Part A, they might have taken a profit percentage anywhere in the range of min 10 to max 35% (inline with company’s profit margins) and would have left the remaining profits for part B which if it comes would be an added bonus

We can get more clarity on part A profit percentage and part B threshold limit details during Q3 concall (request callers to please ask these questions)

Part B portion will be realised only after Telugu and Hindi releases, probably in another month or so …I guess this would add another 50-100% above the final Tamil overseas collections

In short, PhantomFX is already in profit and received their money… profits from overseas collections if any will be an added bonus

D: Invested and positive on VFX Industry

19 Likes
1 Like