Buy Eros International; target Rs 146: GEPL Capital
Brokerage house GEPL Capital is bullish on Eros International Media and has recommended buy rating on the stock with a target price of Rs 146 in its August 22, 2013 research report.
August 26, 2013 / 15:54 IST
GEPL Capital's report on Eros International Media
Eros International Media Ltd (Eros) reported 28 percent de-growth in Net Sales to Rs 18,632 mn in Q1FY14 vs Rs 25,703 mn in Q1FY13. The weak sales numbers were due to lower number of releases during the quarter (12 vs 23 films in Q1FY13).Lower net sales growth affected EBITDA which was 24 percent lower Y-o-Y & 5 percent lower Q-o-Q. However, EBITDA margin improved 108 bps Y-o-Y to 21.2 percent vs 20.1 percent in Q1FY13. This is due to higher contribution from digital library business which is lower cost business compared to distribution & marketing of new movies.PAT came in 7 percent Y-o-Y lower at Rs 293 mn as 255 percent growth in Other Income was offset by 120 percent rise in Finance Expenses. PAT margin improved 353 bps Y-o-Y to 15.7 percent vs 12.2 percent in Q1FY13.Valuation & Viewpoint: "At CMP of Rs 117, Eros is trading at 4x its FY15E EPS of Rs 29. We expect revenues to remain subdued for Q2 & pick up from H2FY14 onwards. Also, the non-theatrical revenue streams will take time to contribute considerably to the topline. The stock has corrected 44 percent in CY2013 & is currently available at attractive valuations. We recommend BUY on the stock with target price of Rs 146, upside potential of 25 percent & exit multiple of 5x FY2015E EPS," says GEPL Capital research report.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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