Buy Eros International; target of Rs 188: Firstcall

Firstcall Research is bullish on Eros International Media and has recommended buy rating on the stock with a target price of Rs 188 in its September 12, 2012 research report.

“Eros International Media Limited is a leading global company in the Indian filmed entertainment industry that acquires co-produces and distributes Indian language films in multiple formats. The company is a part of the Eros International Group. It is a leading global company in the Indian film entertainment industry, and co-produces, acquire and distribute Indian language films in multiple formats worldwide including; theatrical, television syndication & digital platforms. . The success is built on the relationships we have cultivated over the past 30 years with leading talent, production companies, exhibitors and other key participants in our industry. Leveraging these relationships, the company has aggregated rights to over 1,900 films in our library, plus an additional 700 films for which we hold digital rights only. In 2006, Eros International Plc, the holding company of the Eros Group, became the first Indian media company to list on the Alternative Investment Market (AIM) of the London Stock Exchange. “ “Eros International Media Ltd. is a global player within the Indian media and entertainment arena, reported its financial results for the quarter ended 30 June, 2012. Theatrical revenue growth driven by strong theatrical pre sales & box office performance of ‘Housefull 2’; Teri Meri Kahaani’; ‘Vicky Donor’ & ‘Ferrari Ki Sawaari’. The company’s net profit jumps to Rs.314.10 million against Rs.216.60 million in the corresponding quarter ending of previous year, an increase of 45.01%. Revenue for the quarter rose 67.11% to Rs.2570.30 million from Rs.1538.10 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.3.42 a share during the quarter, registering 44.44% increase over previous year period. Profit before interest, depreciation and tax is Rs.539.30 millions as against Rs.382.90 millions in the corresponding period of the previous year.” “During the quarter variable cost rose by 67 per cent mainly on account of increase in operating expenses along with consideration of depreciation in the rupee impact. Total expenditure in Q1 FY13 was at 2114.80 million as against Rs.1263.20 million in Q1 FY12. Employee Remuneration & Other Benefits rose to Rs.61.10 million against Rs.55.10 millions in the corresponding period of the previous year. Other Expenditure stood at Rs. 150.40 million and operating expenses is Rs. 1886.50 million in Q1 FY13 is the primarily attributable to growth of expenditure.“ “At the current market price of Rs.167.30, the stock P/E ratio is at 8.62 x FY13E and 7.37 x FY14E respectively. _ Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.19.40 and Rs.22.69 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 21% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 5.49 x for FY13E and 4.71 x for FY14E. Price to Book Value of the stock is expected to be at 1.52 x and 1.26 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend buy in this particular scrip with a target price of Rs.188.00 for Medium to Long term investment,” says Firstcall Research report. FIIs holding more than 30% in Indian cos 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. To read the full report click on the attachment

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