South Asia’s number one animation company Compact Disc India Limited announced very good results and also exciting future opportunities. This company is ideally positioned to utilise huge opportunities in animation outsourcing and will give good returns to investors. Compact Disc is looking as an exciting stock for risk taking investors who understand and believe in the prospects of animation outsourcing. It already publicly announced business plan for 2008-09 which is rare in small companies.
Significant view: Animation outsourcing business is expected to grow at 35% over the next few years.
Compact Disc India results for 2007-08:
Revenues: 102.7 crore (50.2 crore for 2006-07).
Profit: 19.5 crore (8.18 crore for 2006-07).
Company estimations for 2008-09: Company is expecting 80% growth in revenues and 100% growth in profits in the next financial year. If company will achieve its target, it is an astounding 450% growth in net profit in just 2 years.
Revenues: 183 crore.
Profit: 38.4 crore.
Compact Disc India stock price analysis: 
Chart courtesy: Business Week.
P/E: 4
EPS: 20.3
Book value: 40.7
1 year high-low: 130.9-29.3
Why should you buy Compact Disc India?
1. Company decided to concentrate on its core Animation business which is a very good strategic decision and will stay away from producing action films.
2. It is planning to set up a developing and publishing gaming software production studio at New Delhi.
3. It is a market leader in 3D animation and investors will give good valuations in the coming days.
4. Company’s estimation of 100% growth in the next financial year. Cheap forward valuations.
5. Huge opportunities in animation outsourcing.
6. Compact Disc sold IP rights of an Animation character to Singapore based Golden games for Rs 7.1 crore.
7. It built a new animation studio in Trivandrum to utilise new opportunities.
8. 104% increase in sales and 138% rise in net profit in 2007-08 over 2006-07. Company achieved 493% growth in just 5 years.
9. Strong management and strategic alliances. Company is currently working on projects worth Rs 282 crore.
10. It is not only an outsourcing giant but also creating content to get IP rights.
Verdict: Compact Disc India will give more than 150% returns if you invest in it for 15-18 months. Animation outsourcing business has huge prospects in the coming years and company’s experience will come in handy in utilising upcoming opportunities. If company succeeds in its execution, this stock is definitely a “Multibagger” for long term investors
(Source: Internet)
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