Eros International Media Ltd - Consolidated Q1 FY2014 Results - First Cut - Microsec

Eros International Media Ltd (Eros) announced its consolidated Q1 FY2014 results on 12 August 2013. Both, the company's top line and bottom line remained below our as well as Bloomberg consensus estimates.

While Eros' top line dipped 27.5% q-o-q to Rs. 186.3 Crores, its bottom line declined 7.7% sequentially to Rs. 29.3 Crores in Q1 FY2014. Significant decline in number of films released, during the quarter, remained prime reason for the company's performance remaining below our estimates. Eros released just 12 films in Q1 FY2014 compared with 23 movies released a year earlier. We expected it to release similar number of movies during the quarter, which it released in Q1 FY2013. The below expected performance at top line also dribbled down to Eros' bottom line and kept it lower than our estimates. Although in absolute terms, the company reported a subdued performance, its margins surprised on the positive side. The television licensing deals and Eros Now could have aided to this improvement. Going forward, the company's focus on lucrative licensing, Eros Now, pacts with distributors, and healthy movie pipeline may support its financial performance, especially its bottom line. With this, although the lower than expected performance may lead to a downward revision to our target price of Rs. 326 for the stock, at current levels, the stock continues to remain a STRONG BUY in our view.

Source : Equity Bulls

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