Prime Focus Stock Jumps 86% in One Year Despite Media Sector Decline
Prime Focus Limited has delivered an exceptional 86% return over the past year, contrasting sharply with the 18.7% decline in the Nifty Media Index. The turnaround story is supported by H1FY26 profitability of ₹114.53 crore after years of losses, improved cash flows of ₹295 crore, and investments from marquee investors including Madhusudan Kela and Ranbir Kapoor. However, the company faces challenges with high debt levels of ₹5,255 crore and premium valuations at 120 times earnings, with future performance heavily dependent on the success of its ₹4,000 crore Ramayana project.
*this image is generated using AI for illustrative purposes only.
Prime Focus Limited has defied the broader media sector downturn, delivering an impressive 86% rally over the past year while the Nifty Media Index declined 18.7%. The stock closed at ₹216.80 per share, down 6.20% from the previous day's close of ₹231.12, with a market capitalization of ₹16,823 crore.
Stock Performance Across Timeframes
The company has demonstrated strong performance across multiple periods, though recent momentum has moderated:
| Timeframe | Return |
|---|---|
| 1 Month | -3.64% |
| 3 Months | 25.7% |
| 6 Months | 34% |
| 1 Year | 86% |
| 5 Years | 351.6% |
Business Overview and Global Operations
Founded in 1997 and headquartered in Mumbai, Prime Focus operates as a global media services provider across India, the UK, US, Canada, and Australia. The company offers integrated solutions including visual effects (VFX), stereo 2D-to-3D conversion, animation, post-production services, and digital asset management primarily to Hollywood studios, OTT platforms, and broadcasters.
Key subsidiaries power the company's global operations:
- DNEG (formerly Double Negative): The flagship VFX company responsible for high-end visual effects and CGI work, with multiple Oscar, BAFTA, and Emmy awards
- Prime Focus Studios: Handles film and series production, financing, and development
- Brahma AI: Develops AI-driven solutions for media and enterprise applications
- Brahma AI Holdings and India Technologies: Manage AI technology businesses and software development
Financial Turnaround Signals
After years of losses, Prime Focus reported a significant operational turnaround in H1FY26:
| Financial Metric | H1FY26 Performance |
|---|---|
| Revenue | ₹2,084.09 crore |
| Profit | ₹114.53 crore |
| Operating Cash Flow (March 2025) | ₹295 crore |
| Net Cash Flow (March 2025) | ₹76 crore |
This marks a sharp reversal from previous years of losses, with improved cash flow metrics signaling better working capital management and execution control.
Historical Performance and Debt Concerns
While revenue grew 41% from ₹2,536 crore in FY21 to ₹3,599 crore in FY25, profitability remained challenging. Losses widened from ₹56 crore in FY21 to ₹458 crore in FY25, reflecting high operating costs and the capital-intensive nature of global VFX operations.
Debt levels have risen significantly alongside expansion:
| Period | Total Borrowings |
|---|---|
| FY21 | ₹3,904 crore |
| September 2025 | ₹5,255 crore |
The company indicates much of the Ramayana-related borrowing is dollar-denominated and tied to DNEG's international operations.
Marquee Investor Interest
High-profile stake purchases have boosted investor confidence:
| Investor | Shares Acquired |
|---|---|
| Madhusudan Kela (Singularity Equity Fund I) | 20,83,333 shares |
| Ranbir Kapoor | 12,50,000 shares |
These investments through preferential issues have added credibility to the turnaround narrative.
The Ramayana Project: High-Stakes Bet
At the center of Prime Focus's investment story lies Ramayana, a two-part epic with a reported investment of ₹4,000 crore. Positioned as a global theatrical release showcasing India's technological capabilities, the project involves extensive work from DNEG's VFX teams. While success could significantly improve profitability and brand value, the scale makes it a high-risk proposition that could strain the balance sheet if unsuccessful.
Valuation Concerns
Prime Focus currently trades at a steep valuation of 120 times earnings, significantly above the industry average of 38.2 times. This premium suggests the market is pricing future expectations rather than historical performance, leaving little room for execution errors.
Historical Stock Returns for Prime Focus
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -5.88% | -10.06% | -1.45% | +34.65% | +84.06% | +379.12% |
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