Digikore Studios: A VFX Powerhouse Forges a Diversified Future in H1 FY26

Digikore Studios Limited, a prominent player in the visual effects (VFX) industry, has delivered a stellar performance in the first half of fiscal year 2026, showcasing remarkable resilience and strategic foresight. The company's latest investor presentation and concall transcript reveal a robust financial rebound, driven by a strong demand cycle, strategic diversification into high-margin verticals, and an aggressive global expansion strategy. This period marks a pivotal moment for Digikore as it transforms into a comprehensive media and technology powerhouse, adept at navigating industry shifts.

For H1 FY26, Digikore Studios reported a consolidated total income of INR 36.13 crore, a significant 59.6% increase compared to INR 22.62 crore in H1 FY25. The company's Profit After Tax (PAT) surged by an impressive 117% to INR 6.11 crore, up from INR 2.82 crore in the previous year. This strong growth was underpinned by disciplined execution and an improved operating efficiency, with operating expenses as a percentage of revenue falling to 78.6% from 83%. The management highlighted that operating cash flow also turned positive, reflecting enhanced profitability and collection efforts.

Strategic Pillars of Growth

The company's impressive H1 FY26 performance is not merely a result of post-strike recovery but a testament to its multi-pronged strategic approach. Digikore's core VFX business, particularly episodic content, now accounts for 80% of its revenue, providing strong pipeline visibility and consistent cash conversion. The company has successfully increased its direct work share to 50% in H1 FY26, up from 20% previously, a clear indicator of growing client trust and stronger relationships with major global studios like Disney, Marvel, Netflix, and Amazon.

Beyond VFX, Digikore is aggressively diversifying into high-margin verticals. Its AI SaaS platforms, including Hybrid AI Brand Jingles, SelfSync.ai (AI-powered hiring/HR assessments), and MaxiPitch (an AI-automated sales platform for MSMEs), are positioned as long-term growth drivers, offering scalable, subscription-based revenue. The company is also monetizing its virtual production assets on Unreal Engine's fab.com, with monthly revenues projected to grow significantly by December 2025. Furthermore, Digikore has ventured into branded content production with shows like 'Kaise Banta Hai' and 'Heroes' streaming on JioHotstar, and its YouTube channel 'Binge Fever' aims to monetize these IPs through syndication, licensing, and ad revenues.

Global Expansion and Future-Proofing with AI

Digikore Studios is actively expanding its global footprint, with Europe being a top priority. The company's aggressive sales drives across major European cities have resulted in new vendor enrolments and active bids. A new roadshow is planned for December to further entrench its presence in Europe. To strengthen its North American operations, Digikore is in the process of establishing a subsidiary in New York, aiming to improve response times and anchor growth in the region. This strategic geographic diversification is crucial for reducing dependency on any single market and tapping into broader opportunities.

Recognizing the transformative potential of AI, Digikore is proactively integrating AI tools into its VFX pipeline to enhance productivity and reduce turnaround times. This strategic pivot towards AI-assisted workflows, from rotoscoping and clean-up to full shot automation, is designed to boost margins and scalability. The company views its investments in AI SaaS platforms and proprietary automation tools not as a hedge against disruption but as a springboard to lead the next evolution of the VFX and content creation industry.

Financial Outlook and Management Confidence

Management expressed strong confidence in sustaining a 30% plus CAGR over the next few years, supported by industry tailwinds, a robust sales engine, and technology leverage. The company anticipates VFX margins to stabilize at 16-18% PAT, with the growth of high-margin new verticals expected to push overall PAT margins to 20-22% over the next three to four quarters. Digikore currently holds an order book of over INR 20 crore and a bidding pipeline exceeding INR 35 crore, indicating strong future revenue visibility.

To support its growth initiatives and strengthen its balance sheet, Digikore is completing an INR 45 crore QIP fundraise in November 2025, with INR 20 crore earmarked for debt reduction. This, coupled with promoter warrants of INR 20 crore, signals strong promoter confidence and a commitment to aligning capital structure with long-term growth. Digikore Studios is poised for sustained growth, driven by its diversified service offerings, strategic global expansion, and proactive adoption of cutting-edge technologies.