Eros International Media plunged 19.4% to Rs 353.10 at 15:30 IST on BSE after a report of leading international bank lowering the rating of parent firm Eros International amid concerns over the revenues it is generating from UAE business.
Meanwhile, the S&P BSE Sensex was down 106.16 points or 0.39% at 27,364.65.
Huge volumes were witnessed on the counter. On BSE, so far 7.17 lakh shares were traded in the counter as against average daily volume of 45,210 shares in the past one quarter.
The stock hit a high of Rs 418.80 and a low of Rs 351 so far during the day. The stock had hit a record high of Rs 644.40 on 20 July 2015. The stock had hit a 52-week low of Rs 235 on 28 October 2014.
The stock had underperformed the market over the past one month till 23 October 2015, declining 18.09% compared with 6.38% rise in the Sensex. The scrip had also underperformed the market in past one quarter, dropping 27.47% as against Sensex's 3.17% decline.
The mid-cap company has equity capital of Rs 93.45 crore. Face value per share is Rs 10.
The report had also stated that the bank also raised doubts over whether Eros International will actually be free cash flow (FCF)-positive by FY 2016, as previously guided and also over the validity of the actual ErosNow user count. The bank reportedly said it has relooked at the company fundamentals, taking into account the continued increase in receivables, driven by a sudden spike in revenues booked in the United Arab Emirates (UAE).
Meanwhile, Eros International Media with reference to the news titled "Eros International under Wells Fargo's scanner, stock downgraded has clarified during market hours today, 26 October 2015, that the recent share price volatility of the New York Stock Exchange (NYSE) listed parent firm Eros International and today, 26 October 2015 at Indian stock exchanges of Eros International Media are based on speculative media reports.
The company has reassured shareholders that there has been no material change to the previously announced fundamentals of the company. The company's Q1 results have been strong and nothing materially changed since then. The company has seen further hits in Q2 September 2015 with hit films such as Bajrangi Bhaijaan. The company will be announcing strong Q2 results.
The company said that analysts downgrade or upgrade stock regularly and that as such is not a cause for concern. The US based bank, Wells Fargo did not revise down parent firm, Eros International's earnings estimate for the quarter or the year and the price target is well above the price the stock was trading on the date the report was published. The company said another analyst from other international brokerage has published a very positive report and maintained outperform rating on the same day, Wells Fargo report was published.
On consolidated basis, Eros International Media's net profit surged 48.9% to Rs 53.35 crore on 95.7% growth in net sales to Rs 472.48 crore in Q1 June 2015 over Q1 June 2014.
Eros International Media co-produces, acquires and distributes Indian language films in multiple formats around the world.
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