EROS INTERNATIONAL MEDIA LIMITED is currently trading at 282 ( 52 week High )
BUY CALL RECOMMENDED AT 221.95 ON 23RD JULY, 2014
BOOK SMALL PROFIT HERE AND HOLD FOR LONG TERM
Great Lines !!
Sunday 7 September 2014
Wednesday 23 July 2014
EROS INTERNATIONAL MEDIA LIMITED – BUY
Scrip
Code – 533261 / EROSMEDIA
CMP
– 221.95 BUY AT CURRENT LEVEL.
Medium
to long term target - 257-265
- Market capital – Rs 2,105.26 Cr
- Total shares – 9,19,73,190 shares
- Promoters – 6,88,33,290 shares ( 74.84% )
- Total public holdings – 2,31,39,900 shares ( 25.16% )
- Book value – 96.59 Rs Face value – 10.00 Rs
- Eps – 12.34 Rs Dividend – 15%
- P/E – 18.54 Times Ind P/E – 34.02
- Total debts – 384.08 Cr Enterprise value – 2,326.53 Cr
EROS INTERNATIONAL MEDIA:
EROS INTERNATIONAL MEDIA was incorporated as in 1977 and is based in
Mumbai, India. It was started by Mr. Arjan Lulla. It was earlier known as
Rishima International Private Ltd and changed its name to Eros Multimedia
Private Limited on July 25, 2000. Company again changed its name to Eros
International Media Private Ltd on Nov 20, 2008, On Nov 18, 2009 company again
changed its name to the present Eros International Media Ltd. It is subsidiary
of Eros Worldwide FZ Llc.
Eros International Media
Limited operates in the media and entertainment sector in India and
internationally. It engages in sourcing content through acquisition,
co-production, or production; the theatrical distribution network operation;
licensing films for cable, satellite, and terrestrial television; and the distribution
of Tamil film content in Western Europe through its own television station.
The
company came out with an IPO of about 2 Cr shares in September 2010 at Rs. 175
totaling to Rs. 350 Crs at the price of Rs. 175 and got listed at Rs. 213.35 on
6 Oct 2010. The purpose of the issue was to acquire and co-produce Indian
films. The company also distributes content through physical formats, such as
DVD, VCD, and Blu-rays, as well as the digital mediums comprising Video On
Demand, Direct To Home, Internet, mobile, and in-flight entertainment; and
involved in music publishing and distribution activities. In addition, it
provides production planning and visual effects services for films; engages in
the acquisition, production, and distribution of Tamil films worldwide; and
involved in cable or DTH licensing, as well as trading and exporting
international film rights. The company owns approximately 1,100 films
comprising Hindi, Tamil, and other regional languages & has aggregated
rights to over 1,900 films plus additional 700 films for which the company
holds digital rights only. In the year 2006, Eros International Plc, the
holding company of the Eros Group, became the first Indian company to list on
the Alternative Investment Market (AIM) of the London Stock Exchange. On
November 13, 2013, Eros International got listed on New York Stock Exchange at
$11.10 a share, post NYSE listing, the company has cancelled its shares from
Alternative Investment Market (AIM) london.
Eros International PLC, is the
Ultimate Holding Company based at Isle of Man, Eros Worldwide FZ-LLC is the
holding company based in UAE and the subsidiaries include - Eros International
Films Pvt Ltd, Copsale Ltd, Big Screen Entertainment Pvt Ltd, EyeQube Studios
Pvt Ltd, EM Publishing Pvt Ltd, Eros Animation Pvt Ltd, Eros Digital Pvt ltd,
Eros International Ltd (UK), Digicine PTE Ltd, Ayngaran International Ltd (Isle
of Man). It distributes content through retail outlets and it’s Website under
the Eros and Ayngaran labels. Eros International Media can be locally compared
with PVR Ltd, Prime Focus ltd, Reliance Broadcast Network Ltd, Balaji Telefilms
ltd, Media Matrix Worldwide Ltd, Shree Ashtavinayak Cine Vision Ltd, Tips
Industries Ltd and globally compared with Walt Disney Co of US California, Time
Warner Inc of USA, IG Port Incorporated of Japan, Twenty First Century Fox, Inc
of New York, Lions Gate Entertainment Corp of California, UTV Media PLC of UK,
Dreamworks Animation Skg Inc of California.
|
KEY FINANCIALS
|
FY13
|
FY14
|
FY15E
|
FY16E
|
|
SALES (₹ Crs)
|
1,068.00
|
1,135.00
|
1,344.00
|
1,490.00
|
|
NET PROFIT (₹ Cr)
|
154.00
|
200.00
|
223.00
|
253.00
|
|
EPS (₹)
|
16.80
|
21.70
|
24.20
|
27.50
|
|
PE (x)
|
11.30
|
8.80
|
7.90
|
6.90
|
|
P/BV (x)
|
1.80
|
1.40
|
1.20
|
1.00
|
|
EV/EBITDA (x)
|
8.70
|
6.60
|
6.00
|
5.60
|
|
ROE (%)
|
15.70
|
16.50
|
15.60
|
15.00
|
|
ROCE (%)
|
15.90
|
18.50
|
18.00
|
17.30
|
Sunday 13 July 2014
CAPITAL FIRST LIMITED - INVEST FOR LONG TERM
If we prepare an industry wise list of listed companies, no doubt financial service sector will be at the top by number. At the same time if the list is based on quality of promoters the same sector will be always at the bottom. Lot of bogus paper companies without any business operations are listed in our stock exchanges especially in bse from this sector. So selecting a quality company from this sector warrant a close screening of its promoter’s integrity, executive’s quality and the standard and professionalism of its governing board etc...
Capital first limited ( formerly known as future capital holdings) came out with an ipo in 2008 and allotted shares at a price of rs.765 per share. This company was originally promoted by future group of biyani’s. Later future group had lot of debt related issues mainly in their flagship – pantaloon retail business. Due to this ,future group decided to exit from this company and same acquired by us based private equity investment firm warburg pincus.
Since this company’s business is simple and similar in line with other nbfc’s, i don’t think much explanation is needed about its business side. Why this company is special to me and what distinguishing it from other companies from the same sector is –the people behind it. Before looking into this important factor just few lines about its business- company is an nbfc offering personal loan, loan for consumer durables, gold loan, two wheeler loan, loan against property and distributing various insurance products. Capf is present in 40 cities through its 164 branches.
As on 31march 2014, assets under management (aum) of company increased to rs.97 billion from rs. 75.10 billion Compared with just previous year and capital adequacy ratio is healthy at 24 %. Due to management’s prudent decision to concentrate in retail lending, its gross npa is just 0.45% and net npa is only 0.08% . This is one of the best among any listed nbfc’s. Capf recently received license to start housing finance business through its subsidiary capital first home finance private limited and it is expected to contribute from this year itself.
The Real Differentiators |
As i mentioned at the beginning itself, while selecting
a stock from nbfc sector for investment purpose there is lot of options in this
space. But if we look in detail, many of them are only for name sake and
quality wise very few companies deserve a serious look. Quality of people
behind any company will surely reflect in quality of business. So let us look
behind the curtain to get an idea about the people behind it.
First of all, for a business like nbfc , promoters
ability to infuse funds is core point for business growth. CAPF is
currently owned by one of world’s largest and most reputed us based
private equity investment firm warburg pincus through its
affiliate cloverdell investment ltd. Warburg pincus’ aum is about $48
billion and invested in more than 700 companies in 35 countries. I think,
with such a strong hand behind it , fund raising for expansion is not at
all an issue for capf. Promoter’s currently holding about 72% stake in capf. In
addition to this, recently hdfc standard life insurance company ltd infused
rs.50 cr by subscribing a 4% stake in this company.
Conclusion
After some difficult period under the future group,
CAPF is now moving to the high growth path. Company reported an income from
operations of rs.1067 cr and a net profit of rs.53 cr in f.y 2014.
In a recent
interview md of the company mentioned that the company's profit will
expand substantially in f.y 2015 compared with what it achieved in f.y
2014. In nut shell – there is everything in this company to emerge as one of
the most successful nbfc in future and capital first is my top pick and a must
buy from nbfc sector for any small/mid cap portfolio. Stock is listed
in both exchanges and trading around rs. 204.
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