Buoyed by Q3 margins, Eros welcomes Q4 saying Jai Ho

Sumaira: Margins are at 31.4 percent. Do you think there is more room for you to go higher or do you think this is the level that you can sustain now for the rest of FY14?

A: We are very, very pleased to announce the numbers. This is really excellent performance during the quarter and this is one of the best quarters since our listing in 2010.

If one looks at the top-line of this particular quarter, we have grown at Rs 433 crore by 17 percent and similarly, our PAT at Rs 92 crore has grown by 42 percent, so it is certainly one of the best quarters.

It is not only that the numbers are good, but the margins have really improved. There is a strong improvement in the margins basically because of the excellent performance from the films during quarter and those films were bought at efficient cost. So, we can clearly see that there is a good improvement in the margin and it is not only due to the big releases during the quarter, but also a solid performance from our catalogue monetisation and we will continue to do that.

We have always been emphasizing that the strategy out here is that we are not only dependent on any one or two big releases in any specific period, but it is a portfolio approach which we always want to drive. We want to monetise the entire portfolio across different platforms and this is the time when you can say there is a huge traction on the digital side.

Reema: What was the amount that you generated from catalogue monetisation in this quarter and how much are you planning to monetise in the coming January to March quarter?

A: This particular quarter we have generated about 13-14 percent of the revenues through the catalogue and there is a good traction on the digital side of the catalogue monetization. Digitisation has happened and then there are lot of monetisation opportunities on cable and other internet-based activities. So, we are very hopeful that we will be able to grow this catalogue monetisation over a period of time.

We started some 3-4 years back about 6-7 percent of the overall revenue we used to generate from catalogue. We already have about 13-14 percent revenue coming from catalogue monetisation and going forward, in 3-4 years we will reach to 20-25 percent of overall revenues coming only from catalogue monetisation and that is the key strategy if one looks at a studio model.

We really need to look at that how our whole catalogue continues to generate return because that is directly added to the profitability and directly adds to the free cash flows of the organisation and that is a clear emphasis that how do we generate more and more free cash flows.

Reema: What are the early signs about how the January to March quarter is going to be and is it going to be as blockbuster as the previous quarter was? Any estimate for what the revenue growth could look like?

A: If one sees, in 9 months we have already surpassed last year's numbers in terms of the operating profits. We are already at Rs 158 crore PAT as against Rs 155 crore PAT for the full year last year. So, we are very much optimistic for Q4 also.

We started on a good positive note. We have Jai Ho which got released in January. Then we had one which is a Telugu film from Mahesh Babu. So we have two big releases this particular quarter and we have more films to come during this quarter and a good catalogue monetisation is expected in the coming quarter also.

I think we will be definitely surpassing the expectations of the analysts even for the full year, because we already have crossed analyst expectations for this particular period which is 9 months. So, I think Q4 is also looking very positive and going forward FY15 looks also very positive for us.