-------- 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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