Eros Research Note

Visit us at www.sharekhan.com November 15, 2010 Eros foreign Media fashioning of a blockbuster Company details Price target: grocery cap: 52-week high/low: NSE volume: (No of shares) BSE ordinance: NSE code: Sharekhan code: Free float: (No of shares) Shareholding pattern Public & Others 15% Foreign 8% Institutions 5% Non-promoter corporate 2% emerge Star Buy; CMP: Rs186 Key points Rs247 Rs1,711 cr Rs218/166 30.9 lakh 533261 EROSMEDIA EROSMEDIA 2.0 cr Unique media place with a proven track record: Eros International Media Ltd (EIML) is one of the rare media companies that have shown an impressive and net profitable harvest-festival even in the recent recessionary phase. Its revenues and net profit have grown at an exponential pace of 58% and 157% CAGR respectively during FY2006-10. To sustain its growth in future, the company has chalked tabu aggressive plans to invest close to Rs1,000 crore in co-production and acquisition of direct rights over the next 18-24 months in order to more than doubly its existing gross block of Rs1,016.4 crore by FY2012E.

A de-risked assembly line model: Despite being in the film co-production and scattering business, its unique business model enables the company to recover the bag of its cost upfront through pre-sales of overseas rights, music rights and publicise rights (on television and the other emerging delivery platforms like broadband and 3G), and in-film advertising. EIML has an exclusive tie-up with its parent company for international distribution rights that covers 39% of the cost (30% of sum of money cost with a 30% mark-up, ie 39% of the total cost). Similarly, it has an arrangement with T-series for music rights (wherein it gets 10-15% of the total cost) while television rights cover additional 20-25% of the total cost, thereby taking care of almost 80-85% of the money invested by the company. fortunate revenue mix to further boost its profitability: EIML has shown a significant improvement in its OPM on the back of the... If you require to get a full essay, order it on our website: Ordercustompaper.com

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