Amagi Media Labs has launched its ₹1,800.00 crore initial public offering with management emphasizing that the company's recent profitability turnaround reflects fundamental business improvements rather than pre-listing financial adjustments. Co-founder and CEO Baskar Subramanian stressed that the improving financial performance stems from long-term investments and scale benefits inherent in the company's Software-as-a-Service model.

Financial Performance Transformation

The company has demonstrated significant financial improvement over recent years, with Subramanian highlighting sustained growth momentum. Amagi has maintained approximately 30.00% compound annual growth rate while achieving a dramatic operational turnaround. The most striking transformation has been in profitability metrics, where the company's adjusted EBITDA performance has shown substantial improvement.

Subramanian attributed this turnaround to operating leverage benefits from sustained investments in research and development and global sales initiatives over the past three years.

SaaS Model Driving Profitability

The CEO emphasized that Amagi's Software-as-a-Service business model serves as the foundation for the company's profitability improvements. The net revenue retention rate of 127.00% demonstrates strong customer expansion dynamics, with existing clients increasing their spending significantly year-over-year. Subramanian described this as equivalent to a same-store sales metric, explaining that for every ₹100.00 customers spent previously, they now spend ₹127.00 with Amagi.

This expansion within the existing customer base, combined with declining sales, research and development, and cloud costs as a percentage of revenue, supports management's confidence in continued margin expansion. The company operates what Subramanian characterized as a "classic land and expand business" model.

Future Profitability Projections

Looking ahead, Subramanian outlined ambitious but achievable profitability targets based on industry benchmarks. He suggested that a steady-state EBITDA margin of around 25.00% over the next two to three years represents a reasonable directional aspiration. This projection aligns with comparable global vertical software companies that operate at similar margin levels.

The CEO emphasized that Amagi remains in the early stages of capturing a large structural shift in the media industry. With less than 10.00% of the global market having moved to cloud-based solutions, approximately 90.00% of the market requires transformation over the coming decade. Currently serving more than 450 customers against a potential market of over 10,000, Amagi sees substantial opportunities for both new client acquisition and expanded offerings within its existing customer base.

Strategic Capital Allocation

Regarding the use of IPO proceeds, Subramanian confirmed that a portion will support inorganic growth initiatives. The company positions itself as a "glass-to-glass" media company offering comprehensive end-to-end capabilities, competing primarily against legacy hardware vendors. The acquisition strategy focuses on three key areas:

• Adjacent capabilities to expand service offerings
• Technology tuck-ins to enhance platform functionality
• Companies with existing customer contracts to accelerate market penetration

Subramanian noted that major capital investments in Amagi's core platform, 'Amagi Now', have been completed. The company is now entering a phase of harvesting those investments while deepening its presence in a market still at the beginning of its cloud-driven transformation.

Investment expert Deven Choksey has issued a 'Subscribe' recommendation for Amagi Media Labs Limited's initial public offering, advising long-term investors to participate in the ₹1,789 crore IPO. The recommendation comes ahead of the company's public listing, with Amagi having already raised ₹805 crores from its anchor book.

Company Overview and Business Model

Amagi Media Labs Limited operates as a cloud-native software-as-a-service (SaaS) company serving the media and entertainment industry. The company provides an integrated platform that enables customers to create, prepare, distribute, and monetize video content across streaming and connected-TV ecosystems. The platform spans the entire workflow from production through content preparation to distribution and monetization, helping customers reduce operational complexity while improving time-to-market for channel launches and advertising monetization.

Strong Financial Performance

The company has demonstrated robust revenue growth over the past three fiscal years, reflecting the scaling adoption of its platform across multiple geographies, particularly in the Americas region.

Expanding Customer Base and Market Reach

Amagi Media Labs has successfully expanded its customer base, demonstrating strong market traction and platform adoption. The growth has been supported by stronger monetized ad impressions and increased distribution throughput across the company's network.

Investment Rationale

Deven Choksey's positive recommendation for long-term investors is based on several key factors:

• Increasing technology penetration in the media and entertainment sector
• Expanding gross margins indicating improved operational efficiency
• Clear visibility of future revenue streams
• Strong geographic diversification with leadership in the Americas region

The investment expert emphasizes that the recommendation is specifically targeted at long-term investors who can benefit from the company's growth trajectory in the evolving streaming and connected-TV landscape.