Why are brokerages bullish on Eros International Media?

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Why are brokerages bullish on Eros International Media?

The Rs 350 crore IPO of Eros International Media, part of the Eros Group, which is a global player within the Indian media and entertainment sector, has been subscribed nearly 50%.

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The Rs 350 crore IPO of Eros International Media, part of the Eros Group, which is a global player within the Indian media and entertainment sector, has been subscribed nearly 50%, as per data available on NSE website.

It has fixed a price band of Rs 158-175 per equity share for the issue, which closes on September 21, 2010.

Experts as well as brokerage firms look bullish on this issue and advised subscribing the same. Investment Advisor, SP Tulsian says, the issue seems to be fairly priced. "Those looking to take an exposure in this sector, can go for it!"

KRChoksey says, "Considering potential growth in Film industry and expanding exhibition platform in India, we see strong opportunity for increase in theatrical revenues, thereby providing opportunity for movie content and distribution players. Also we are sanguine about rapid analogue to digital migration and emergence of new digital media platforms which have provided the opportunity to de-risk the movie business model through pre-sale of rights. Eros with 30 years of experience in acquiring movie rights and strong movie distribution network in India is expected to largely benefit."

"In addition, Eros has partnership agreement with Eros plc which gives ready exposure to international revenues. On upper price band, the issue is priced at 13.8x of consolidated FY11E EPS of Rs 12.6 which is at significant discount compared to its closest peer UTV Software, trading at FY11E P/E of 33x. We recommend a subscribe to Eros International Media IPO," according to its report.