Animation studio Assemblage Ent’s FY18 net profit jumps to Rs 3.16 cr

MUMBAI: Indian animation studio Assemblage Entertainment has increased its FY18 net profit to Rs 3.16 crore from Rs 0.42 crore in the previous fiscal. The profit before interest lease depreciation and tax (PBILDT) was up at Rs 7.6 crore compared to Rs 4.3 crore

The company promoted by A. K. Madhavan and Arjun Madhavan has expanded its operating income to Rs 34.92 crore from Rs 28.95 crore.

Assemblage Entertainment Private was incorporated in 2013 and is engaged in providing 3D animation services for interactive content development, visual imagery and production of high-quality CGI animation content for full-length features, DVDs and television series. It also develops gaming applications for mobile devices.

The infrastructure and technology deployed are ISO/IEC 27001:2013 certified. The company is mainly into the development of full-length feature films for Hollywood studios and independent production companies globally.

It has delivered full-length feature films like Norm of the North, and Blinky Bill. It has also developed Trollhunters, which is a Netflix original series which has won several Emmy and Annie awards.

The company has a team comprising of over 280 people of technocrats, artist and management professionals with its controlling office at Andheri (Mumbai).

Care Ratings has assigned BBB- ratings to Assemblage Entertainment’s total bank facilities worth Rs 11.8 crore.

The ratings assigned to the bank facilities of the company derive strength from the moderate track record of operations with highly experienced and resourceful management, established relationship with reputed customers, healthy profit margins and comfortable capital structure & debt coverage indicators.

The ratings, however, are constrained by modest albeit growing scale of operations, Working capital-intensive nature of operations, operations in the competitive and fragmented industry with geographical concentration risk, foreign exchange fluctuation risk, and data theft risk.

The ability of the company to increase the scale of operations, maintain its profitability, capital structure and efficiently manage the operating cycle are the key rating sensitivities.

The customer profile of Assemblage is concentrated as the company has been involved with major seven clients in the last five years. The company is significantly dependent on the US and European markets for the business and any change in these markets would adversely affect its revenues.

Further, AEPL majorly earns its revenue in foreign currency i.e. dollars and Euros. fluctuations in the dollar prices vis-à-vis Indian rupee. Hence, the company is exposed to foreign exchange fluctuation risk. However, the company minimises the forex risk to an extent by evaluating hedging through forward contracts.