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Indian entertainment major Eros International reported higher fiscal second-quarter results.
The company reported a net income increase of 155 percent to $11.0 million, compared to $4.3 million in the prior year period. Revenue jumped 98 percent to $98.8 million.
Eros is a leading distributor of Indian films with over 3,000 titles in its library spanning Hindi language Bollywood and regional Indian cinema and is based in London and Mumbai. The company’s stock has been under pressure recently after some online reports questioned its financials and the performance of its Netflix-style service ErosNow.
It was first questioned by an anonymous Twitter user with the handle Market Farce. Last week, U.S. law firms announced they will investigate claims on behalf of shareholders against Eros for possible securities violations. Though the matter hasn’t yet gone to court, the law firms include Boston-based Block & Leviton, Irvine-based Khang & Khang and New York-based Wolf Haldenstein Adler Freeman & Herz.
Eros has issued earlier statements referring to the “anonymous attacks”, but the announcement for its quarterly results didn’t refer to these allegations directly. A statement from the company’s CEO Jyoti Deshpande said: “It gives me great pleasure to report our second quarter fiscal 2016 results which demonstrate that our business is strong. Fiscal year 2016 has been one of our best years yet in terms of film slate performance as Eros films currently hold three out of the top four box office positions in India.”
An earnings conference call featured discussion of the recent investor concerns. Jefferies analyst John Janedis said in a report on Wednesday: “We believe the market is not giving Eros credit for the value of its film library and potential of ErosNow … However, given external headwinds, it may take a couple of quarters of execution for the market to better appreciate the stock.”
The company has had a good run this year with Bollywood hits Tanu Weds Manu Returns and blockbuster Bajrangi Bhaijaan, starring Salman Khan. It is estimated to have brought in more than $75 million since its July release.
The company recently also announced its quarterly results for its Mumbai-based India subsidiary, with the profit jumping 80.2 percent to $13.7 million (903 million rupees) from $7.6 million (501 million rupees). Revenue rose by over 112 percent to $77.2 million (5.1 billion rupees).
“Our future slate for the remainder of the year and fiscal 2017 continues to be exciting and we believe that our strong balance sheet and improving cash flow from operations will help us to stay in line with our strategy,” added Deshpande. “In the face of adversity, the unwavering support some of our shareholders have shown towards us is indeed overwhelming and for that we are thankful.”
However, the ongoing attacks have led to recent stock volatility on both the New York and Bombay stock exchanges. In recent months, following a 52-week high of $39 in New York, Eros shares have fallen by over 75 percent.
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