-------- Forwarded Message --------
Subject: Eros Int. Media: "Power Of Bhaijaan"
Date: Tue, 27 Oct 2015 09:27:45 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*Another instance of buying a "good business in temporary distress *
*or in an unusual condition"*
(Presuming that its account books are not cooked !!)
*CMP: 354*
*Buy: 341-320*
*TGT: 363-411-432-475-500 (1-3M)*
*
*
*TGT: 575-602-644 & 805-950 (12-24M)*
*
*
*TSL< 315/290*
NOTE: Consecutive closing below 315 for any reason, EIM can further fall
up to 290-274 & 247-235-220 zone, where it can be again accumulated for
better investment buying average, depending on the news flow.
*Some key takeaways & rationale:*
We all know the reasons behind the EIM's massive 20% fall yesterday,
following 17% fall in NYSE overnight.
As par reports in BBG, there was a twitter account apparently belong to
some disgruntled ex-employees of the company (EIM), flashing red flags
and alleging the company's books might be cooked to show some fictitious
income, specially from its UAE operations.
Taking the cues, Wells Fargo noted that it is "not comfortable" with
EIM's business outside India. As par WF, sudden spike in revenue in EIM
from UAE has some doubts and its user account data for the digital
platform *Eros Now" do not match with the external app downloads data.
Also there is a a significant amount of sundry debtors pending for
collections from the UAE operations and EIM is also not able to
"collecting" the same (receivables days increased to 269 from 161 in
FY-14 !!).
Even after concall, analysts are some how taking a "wait & watch" stance
for EIM and all are waiting for Q2FY16 result (consensus EPS at 9.85
against 5.69 QOQ & 5.41 YOY) and actual position of its UAE operations.
Although, the company has denied the above allegations in a strongly
worded statement and maintaining that its fundamental remains strong as
announced previously.
As par some other analysts, these UAE concern of EIM is nothing new and
the management has already explained its stance as for benefit of tax
purposes.
Going by the time & price action on the scrip, some big investors may
already "smelt the rat" and exited. This explains over 45% correction in
EIM scrip from its mid July peak of 644, despite some recent
blockbusters like "Bajrangi Bhaijaan, Srimanthudu, Welcome Back" etc.
Forthcoming scheduled releases, such as "Bajirao Mastani" & some others
are also expected to do well as par as box office collections are
concerned.
EIM is the only listed player in the Indian media, that operates in a
vertically integrated studio model-controlling content, distribution &
exploitation across all formats globally.
*Now, technically, 343-320 is a strong support zone for EIM and all the
above bad news may be discounted by the market to a great extent,
unless, of course, its being proved that the company is not manipulating
its books of accounts to show higher income (like Satyam !!).*
Underworld/unaccounted/black money financing in Indian film industry is
not new and they are taking the advantage of some tax loopholes.
Hopefully, the power of "Bhaijaan" will "take care" of this "unusual"
situation in EIM in the days ahead along with "Power Of Charts".
*As par BG metrics & current market parameters and also believing in
EIM's published numbers :*
Present median valuation of EIM may be around: 620 (FY:15)
Projected fair valuations might be around: 675-810 (FY:16-18)
SCRIP EPS(TTM) BV(Act) P/E(AVG) Low High Median
200-DEMA 10-DEMA
EROSMEDIA 28.31 158.7 30 622.52 618.68 620.60 456.3 450.69
EROSMEDIA 32.95 183.5 30 671.60 667.46 669.53 456.3 450.69
EROSMEDIA 39.5 212.7 30 735.33 730.80 733.07 456.3 450.69
EROSMEDIA 47.75 245.5 30 808.49 803.50 805.99 456.3 450.69
*Analytical Charts:*
<http://2.bp.blogspot.com/-0lB2ouEKLSM/Vi7v4GvfLgI/AAAAAAAAEm4/fP6hI2CZuhU/s1600/EIM-WK-26-10-2015.png>
<http://3.bp.blogspot.com/-F3lF926BaGg/Vi7v5zLTYPI/AAAAAAAAEnA/ipNPYRP_45s/s1600/EIM-FIBB-26-10-2015.png>
<http://3.bp.blogspot.com/-XhzWJnQp_r0/Vi7v8Jr3ATI/AAAAAAAAEnI/9nPBkEOBP2k/s1600/EIM-WK-MA-26-10-2015.png>
<http://4.bp.blogspot.com/-llv0lM7S8m0/Vi7wAlLckJI/AAAAAAAAEnQ/2UfDxunr4ow/s1600/EIM-TL-26-10-2015.png>
<http://2.bp.blogspot.com/-uLOY0uh1ulI/Vi7wDGRjuLI/AAAAAAAAEnY/T9k88cMpzRA/s1600/EIM-TL-RSI-26-10-2015.png>
<http://2.bp.blogspot.com/-sEa6DthiQZA/Vi7wFPlQqzI/AAAAAAAAEng/QseOx4xJWCs/s1600/EIM-PATTERN-26-10-2015.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.in)
NCFM-TA Certified
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