The Hindu Business Line : Crest Animation leaps on aggressive buying

THE stock of Crest Animation Studios (formerly Crest Communication) on Wednesday created a new 52-week high on aggressive buying by a section of prominent market makers.

According to brokers and dealers, certain operators have picked up substantial chunk of the stock from the market recently. Reliance Media & Entertainment Fund has been a prominent buyer in the stock, while Taib Bank was notable seller last month.

At today's closing of Rs 84.60, the stock traded at around 10.5 times its 2005-06 estimated earnings of Rs 8 per share, according to Mr Gaurav Dua of Anagram Stockbroking.

"Driven by success of some its productions in overseas market, Crest has seen exponential growth in its order book during the last few quarters.

Having established itself as cost effective and a quality animation production house in developed markets, the company is well placed to tap the vast potential for Hollywood's outsourcing of animation work," Mr Dua observed.

It has already turned the corner during the first half of this year, posting a net profit of Rs 1.1 crore as compared to the net loss of Rs 3 crore in the corresponding period of last fiscal, Mr Rajesh Aggarwal of CD Equisearch pointed out.

According to him, this sector is increasingly opening up for the Indian players.

Globally, animation business has been boosted by the phenomenal success of animation flicks such as `Finding Nemo' and `Shrek 2'.

`Finding Nemo' has turned out to be the 9th largest revenue grosser ever, reaching box office collections of $844 million.

This was followed by `Shrek 2', which reported biggest first 5-day collections of $12 million and the quickest to gross $ 300 million.

"This has led to increased demand from the key end user segments of gaming and animation films industry," Mr Dua added.

Crest has proven itself as an animation house with skills and capabilities to produce quality animation work.

Animation series "Jakers! The Adventures of Piggley Winks" created by Crest for Mike Young Productions, was aired at primetime on PBS, a leading terrestrial network in the US.

This program has been nominated for the esteemed "Annie Awards" in the category of Outstanding Achievement in an Animated TV production for Children.