Buy Eros International; target of Rs. 311: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct’s report on Eros InternationalThe topline came in at Rs. 504.9 crore against our estimate of Rs. 495.4 crore driven by movies like Bajrangi Bhaijaan (net domestic box office collection of over Rs. 300 crore), Welcome Back (gross collection of over Rs. 100 crore) and Srimanthudu (regional movie, which went on to become all-time second highest Telugu grosser). The EBITDA margin at 26.9% was lower than our estimate of 31.7% mainly due to higher operating expenses, which can largely be attributed to higher marketing costs due to a mix of films comprising more of high and medium budget movies. PAT came in at Rs. 90.4 crore against our estimate of Rs. 112 crore mainly due to lower operating margins, which led to a PAT missOutlook and Valuation We highlight that recent questions that have cropped up have been a big dent to investors’ confidence despite the company’s point by point rebuttal. While we continue to have faith in Eros’ business model, we believe a lot needs to be done by the company to restore investors’ confidence. Possible decisions such as announcing dividend payment, a possible share buyback (at parent level) or improvement in receivables would remain few key monitorables for confidence building. We continue to maintain BUY rating valuing it at 10x FY17E EPS to arrive at a target price of Rs. 311. We believe a strong financial performance coupled with improved debtors would be the driver for the stock price performanceFor all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions

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