Eros Intl soars on hopes of good performance in second half

Eros International Media has soared 11% to Rs 204, extending Friday’s 10% rally, on hopes that the company engaged in the business of film production and exploitation may report good performance in the second half (October-March) of current financial year 2012-13.

The company has reported 17% year-on-year growth in its net profit at Rs 57.49 crore on back of 48% jump in operational revenue at Rs 486 crore for the first half ended September 2012.

The company’s net debt could decline in the second half as most investments towards Q3 releases already in Q2 balance sheet, according to analyst at Anand Rathi Securities.

 

 “Strong movie slate in the second half of current fiscal, which fully funded, can lead to free cash flows,” analyst at HDFC Securities said in recent report.

The management estimates the margin to sustain due to strong movie pipeline in the second half of 2012-13. On full year basis, management guides tax rate to remain at around 30% against 40% in first half. This should also boost 2HFY13 earnings, added report.

Meanwhile, in order to increase its public share-holding to at least 25% by June 3, 2013, the prompter have to reduce their stake to 75% as per Sebi norms.  As of today, Eros Worldwide FZ LLC and Eros Digital Private Limited has collectively hold 77.80% stake in the company

The stock opened at Rs 190 and hit a high of Rs 210 on the BSE. The counter has seen huge trading activities with a combined 4.78 million shares have already changed hands on the counter so far against an average sub one million shares that were traded daily in past two weeks.