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Eros International :All eyes on “No Problem”
Event: Release of much awaited movie “No Problem” on December 10, 2010
Eros International Media Ltd (EIML) is all set to release its much awaited movie
“No Problem” on December 10, 2010. The film is produced by Anil Kapoor Film
Company, Rawail Grandsons Entertainment & Software and Spice Entertainment,
and is directed by Anees Bazmee. As a director, Mr Bazmee has tremendous success
record in the recent past with back-to-back super successful hits like “No Entry”,
“Welcome” and “Singh is Kinng”. “No Problem” has an ensemble of multi-talented
actors, including Anil Kapoor, Sanjay Dutt, Akshaye Khanna, Paresh Rawal, Sushmita
Sen and Kangna Ranaut.
Looking at the past record of the movie’s director Mr Bazmee, we expect “No
Problem” to do well at the box-office, thereby boosting EIML’s financial prospects.
In addition to “No Problem” EIML is releasing its live action animation film, “Toonpur
Ka Superrhero”, directed by ad filmmaker Kireet Khurana, on December 24, 2010.
The film is produced by Krishika Lulla and Kumar Mangat, and stars Ajay Devgn and
Kajol in the lead roles.
“Golmaal 3” and “Endhiran” set box-office on fire…
EIML’s last release, “Golmaal 3”, which was released on November 5, 2010, is
doing exceedingly well at the box-office with gross collection of more than Rs117
crore worldwide since its release, with Rs102 crore in India (net collection: Rs67
crore) and Rs15 crore overseas in its first week.
On the other hand, “Endhiran” the Rajnikanth starrer, is amongst the top five
grossing Indian films in the overseas markets. In the opening weekend, “Endhiran”
has recorded a gross overseas box-office collection of Rs61 crore. This film has
been released by Ayngaran International, which is a 51% subsidiary of Eros
International.
Valuation
After the super success of “Golmaal 3” and “Endhiran”,
all eyes are now set on one of the biggest releases of the
year, “No Problem”, which is set to release on December
10, 2010. We expect the movie to do well at the boxoffice
looking at the past record of the movie’s director.
With three big successful releases in the quarter, we
expect the Q3FY2011 financial performance of EIML to
be fairly good.
Since its listing on the bourses on October 6, 2010, EIML
has significantly underperformed the broader market
indices with a 13% decline from its high of Rs190.
Currently, the stock is trading at Rs168, which is below
its public issue price of Rs175. We believe EIML with its
healthy and consistent financial track record and strong
business model deserves a much better valuation. We
remain positive on EIML. We maintain our Buy
recommendation on EIML with a 12-month price target of
Rs247 (at our price target the stock will be valued at 15x
FY2012E).
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