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About the Company
Eros International Media Limited is a leading global company in the Indian film entertainment industry. The company is part of Eros
International Plc. It acquires and co-produces filmed entertainment content and distributes it across theatres, home entertainment,
television and new media formats within India and abroad.
Eros has rich experience of over three decades in establishing a global platform for Indian cinema. The movie library of the company
has more than 1,100 films of various languages. The group has an enviable distribution network that spans across 50 countries and
27 dubbed foreign languages. It has offices in India, US, UK, Dubai, Australia, Fiji and Singapore. The company releases an average
of 76 films every year.
The company distributes content through both physical formats such as DVD, VCD, Bluerays etc as well as the latest digital
mediums such as VOD, DTH, Internet, Mobile and inflight entertainment.
Investment Rationale
In the first half of the current fiscal (H1FY12), Eros has released 42 movies in various languages. This includes 12 Hindi movies, 28
Tamil and 2 other languages movies. Satellite revenue witnessed a healthy growth in the first half.
During the first half, the company has successfully executed 360 degree release campaigns. This includes brand tie-ups, outdoor,
television, print, in-cinema, radio, mobile and online medium to generate momentum and pre-release anticipation for a particular
movie. This strategy has applied in Eros’s recent releases like ‘Ra One’ and ‘Zindagi Na Milegi Dobara’.
Eros’s super hero action film, ‘RaOne’, has set a new record at Indian box office. The film has earned ` 1,700mn worldwide in the
first five days of release. Weekend gross collection in India stood at ` 1,372.50mn and net collection ` 960mn. ‘RaOne’ opened in
more than 4,000 screens worldwide. Among them around 3,100 screens were in India. Its other releases ‘Desi Boyz’ and ‘Rockstar’
also performed well in box office.
The company has expanded its future movie slate by adding a number of high profile movies. This includes more than 10 Hindi
movies. Majority of these movies will release in the next two fiscals, which gives good revenue visibility for the company in the
coming two fiscals. The revenue from the sale of satellite rights to TV channels will also expected to improve significantly in the time
ahead on the back of increasing competition among channels to improve their TRP. Eros’s pre-licensing deal with television
broadcasters in India helps it to secure itself from risk associated with the cost of movie.
Valuation
The stock is currently trading at a P/E of 10.31x for FY13E and 8.21x for FY14E. At ` 198 per share the stock is trading at 1.87x to
the book value of FY13E and 1.52x to the book value of FY14E. Consolidated revenue and net income of the company are expected
to grow at a compounded rate of 18% and 23% respectively over FY11 to FY14E. We set the target price at ` 292 for this scrip.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
About the Company
Eros International Media Limited is a leading global company in the Indian film entertainment industry. The company is part of Eros
International Plc. It acquires and co-produces filmed entertainment content and distributes it across theatres, home entertainment,
television and new media formats within India and abroad.
Eros has rich experience of over three decades in establishing a global platform for Indian cinema. The movie library of the company
has more than 1,100 films of various languages. The group has an enviable distribution network that spans across 50 countries and
27 dubbed foreign languages. It has offices in India, US, UK, Dubai, Australia, Fiji and Singapore. The company releases an average
of 76 films every year.
The company distributes content through both physical formats such as DVD, VCD, Bluerays etc as well as the latest digital
mediums such as VOD, DTH, Internet, Mobile and inflight entertainment.
Investment Rationale
In the first half of the current fiscal (H1FY12), Eros has released 42 movies in various languages. This includes 12 Hindi movies, 28
Tamil and 2 other languages movies. Satellite revenue witnessed a healthy growth in the first half.
During the first half, the company has successfully executed 360 degree release campaigns. This includes brand tie-ups, outdoor,
television, print, in-cinema, radio, mobile and online medium to generate momentum and pre-release anticipation for a particular
movie. This strategy has applied in Eros’s recent releases like ‘Ra One’ and ‘Zindagi Na Milegi Dobara’.
Eros’s super hero action film, ‘RaOne’, has set a new record at Indian box office. The film has earned ` 1,700mn worldwide in the
first five days of release. Weekend gross collection in India stood at ` 1,372.50mn and net collection ` 960mn. ‘RaOne’ opened in
more than 4,000 screens worldwide. Among them around 3,100 screens were in India. Its other releases ‘Desi Boyz’ and ‘Rockstar’
also performed well in box office.
The company has expanded its future movie slate by adding a number of high profile movies. This includes more than 10 Hindi
movies. Majority of these movies will release in the next two fiscals, which gives good revenue visibility for the company in the
coming two fiscals. The revenue from the sale of satellite rights to TV channels will also expected to improve significantly in the time
ahead on the back of increasing competition among channels to improve their TRP. Eros’s pre-licensing deal with television
broadcasters in India helps it to secure itself from risk associated with the cost of movie.
Valuation
The stock is currently trading at a P/E of 10.31x for FY13E and 8.21x for FY14E. At ` 198 per share the stock is trading at 1.87x to
the book value of FY13E and 1.52x to the book value of FY14E. Consolidated revenue and net income of the company are expected
to grow at a compounded rate of 18% and 23% respectively over FY11 to FY14E. We set the target price at ` 292 for this scrip.
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