The Percept Picture Company said the film was scheduled for release in October 2007 after the original film topped the Indian box office for a month and took more than 100 million rupees (2.25 million dollars).

The company said they wanted to ensure "Indian stories reach out to Indian children the Indian way," chief operating officer Mahesh Ramanathan said in a statement.

"The sequel is a reaffirmation of PPC's faith in creating world class animation content," he said Friday.

The original "Hanuman" movie, a diversion from the country's normally formulaic Bollywood movie offerings, took four years to make and cost 80 million rupees (1.8 million dollars), a record for an Indian animation movie.

The 90-minute film featured 40 characters and at least 250 artists created more than 200,000 individual images for the process.

"Full-length animation films are a costly affair, but Lord Hanuman has paid dividends to its maker," said Vinod Mirani, a Bollywood trade analyst.

Hanuman is a mythical monkey god who led an army to Sri Lanka to free the abducted wife of the Hindu deity Rama.

He is often pictured as a robust monkey holding a golden 'gada' (mace) a sign of bravery, with a picture of Rama tatooed on his chest.

Hanuman was the first major animation film aimed at the domestic audience but India has already sparked the interest of Hollywood as a low-cost base for producing animation.

Indian companies earned nearly 300 million dollars as an outsourcing destination for Hollywood animation projects last year with that sum estimated to grow to 950 million by 2009, according to the National Association of Software and Services Companies (NASSCOM).

Analysts cite India's cutting-edge IT skills, its large pool of highly educated English-speakers and its lower manpower costs as reasons for the outsourcing surge.