Thursday, October 7, 2010

EROS INTERNATIONAL MEDIA LTD - BUY









Film industry is always a risky one ,but higher profit is always associated only with higher risk.So this recommendation is only for higher risk takers as the business of the company. Eros International Media Ltd(EIML) is a newly listed player from this space .This 30 year old company is a dominant player in movie distribution/co-production in India  and abroad. Overeseas distribution activities are mainly channelised through Eros international Plc (An AIM (UK)) listed company and Eros worldwide . Back home ,along with the strong presence in  national level ,its indirect subsidiary Ayngaran International is a reputed name in Tamil film industry. Other associate companies under its fold includes Big Screen entertainment,Eros Animation, Eye Qube Studios, Ayngaran International(UK) Ltd..etc.Currently company having a movie library of over 1000 film which is one of the largest in India. Company’s CAGR of film distribution is showing a strong 33% for the period 2008-2010. It also having strong visibility for next 2 years and availability of fund at lower cost through IPO is expected to improve its competitive position in the industry .. In the current FY company is expected to post an EPS close to Rs.12/- on the diluted equity . Even if the competition is heating up in this sector , EROS’s longstanding experience is a real asset for the company. Yes, few flops may rewrite the story and there may be volatility in earnings on periodic basis ,  but  experience of promoters and their history may help the company to bring  big surprises going forward .Remember ,it is only for high risk takers .Currently it is trading around Rs.190/- which is just 10% above its IPO price.  

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