COMPANY OVERVIEW:
Compact Disc India Ltd was established in the year 1992. The company is promoted by Mr. Suresh Kumar, Mrs. Rashmee Seengal and Mr. Santosh Grover. The main objective of the company is to manufacture compact disc.

Today company is the largest animation company in South Asia. It is engaged in multimedia and entertainment production in India. It has extensive expertise in creation, distribution and management of content for Media and entertainment sector. Beside India Company has strong presence in Malaysia and Singapore.
Compact Disc is respected in the animation industry for the quality of content and timely delivery. Company is fast emerging as the undisputed leader in animation film industry in Asia.

Company has outsourcing contract with iMedia Ventures Ltd, a part of the world`s largest media house. CDI is also associated with White Light Entertainment, the world`s largest production house.

INDUSTRY OUTLOOK:
Animation outsourcing has become a very big industry globally. India is gaining footage in this multibillion dollar industry because of the pool of highly skilled labor that India have. Animation and game outsourcing is the new buzz and India is capitalizing on this new opportunity. The industry is growing leaps and bound at around 25% compounded annually.

INVESTMENT RATIONAL:
Company is shown robust growth in the past 5 years. It has been growing at CAGR of 75% annually in revenue.
Animation outsourcing business is growing rapidly and company is well positioned to encash the boom.
The low cost and talented labor in India put the company at competitive advantage in the global market.
Company is almost debt free.
PAT is growing at CAGR OF 209%. The robust earning is expected to be maintained for next 2 years.
Stock is available at attractive PE of 1.56X.
Company has good track record of paying dividend. It pays around 10%.
Stock is trading at below book value. The price to book value ratio is 0.85.

	NO. OF SHARES	% OF TOTAL
PROMOTERS	1920726	20.01%
INSTITUTION	14068	0.15%
GENERAL PUBLIC	7665206	79.84%
GRNAD TOTAL	9600000	100.00%

	31/03/06	31/03/07	31/03/08	31/03/09
TOTAL INCOME	33.53	50.29	102.78	192.1
EXPENDITURE	-31.29	-41.3	-81.96	-147.49
PBDITA	2.24	8.99	20.82	44.61
DEPRECIATION	-0.14	-0.15	-0.13	-0.15
PBIT	2.1	8.84	20.69	44.46
INTEREST	-0.07	-0.05	-0.03	-0.65
PBT	2.03	8.79	20.66	43.81
TAX	-0.7	-0.61	-1.16	-4.31
PAT	1.33	8.18	19.5	39.5

Key Highlights:
CAGR IN TOTAL INCOME IS 78.9%
CAGR IN PBDITA IS 171%
CAGR IN PAT IS 209%

	31/03/06	31/03/07	31/03/08	31/03/09
EPS	1.385417	8.520833	20.3125	41.14583
PBDITA MARGIN	6.680585	17.87632	20.25686	23.22228
NPM	3.966597	16.26566	18.97256	20.56221
INTEREST COVER	30	176.8	689.6667	68.4

Key Highlights:
EPS has shown a good CAGR of 200% over 5 Years.
PBDITA margin has increased from just 7.7% on FY06 to 23.2% in FY09.
NPM too have shown good improvement from 4% in FY06 to 20.6% in FY09.
Company is almost debt free. The interest cover is very high.

	Q2FY09	%CHANGE	Q2FY10
TOTAL INCOME	46.68	32.10%	61.67
EXPENDITURE	-37.33		-48.83
PBDITA	9.35	37.30%	12.84
DEPRECIATION	0		0
PBIT	9.35		12.84
INTEREST	-0.01		0
PBT	9.34		12.84
TAX	-0.25		0
PAT	9.09	41.25%	12.84

Key Highlights:
Total Income jumped 32.1% on YoY basis.
PBDITA surged by 37.3% on YoY basis.
PAT moved up by 41.25% on YoY basis.

VALUATION &OUTLOOK:
At cmp of Rs 64 the stock is trading at 1.4X. The stock seems to be at throw away price. Even if we value the company very conservatively at 4X, the fair value comes at Rs 164. Sooner or later value always catches the right level. We expect company EPS for FY09-10 to be in range of Rs 52-56.
Stock is also trading well below the book value. So it is also worthwhile to buy on the basis of only book value.
The outlook of the business is very bright. The industry is expected to grow at 25-30% annually. As the company is leader in the industry so it will report very good numbers going forward.

CONCLUSION:
Investor who have patience and have the ability to hold the stock for next 6-8 month can take position on the counter.