India's Eros Media seeks to reassure investors as shares slump
26/10/2015 10:50
MUMBAI, Oct 26 (Reuters) - India's Eros International Media
EROS.NS said on Monday the company had "strong" fundamentals,
seeking to reassure investors following a slump in its New York-
and Mumbai-listed shares after an analyst raised questions about
its business operations.
Shares of Eros International Media, a producer and
distributor of Indian movies, slumped as much as 20 percent in
Mumbai trading. Its parent company, Eros International Plc
EROS.N , lost 16.6 percent in U.S. trading on Friday.
The falls came after Wells Fargo, in a report on Friday,
said Eros had seen a "sudden spike" in hard-to-understand
revenue booked from the United Arab Emirates, calling that a
"red flag" for some investors and adding it was not fully
comfortable with so much revenue coming from outside India.
Wells Fargo also said it was uncertain about Eros' user
count for its ErosNow movie, TV and music streaming application,
saying that numbers did not square with public web sites that
track app downloads.
Eros, in its India statement, did not directly address Wells
Fargo's concerns, but sought to reassure investors.
"There has been no material change to the previously
announced strong fundamentals of the company," Eros said.
"Our Q1 results have been strong and nothing has materially
changed since then," the company added. "We will be announcing
what we expect to be strong second quarter results in the first
half of November."
The Wells Fargo report came after a tough past few days for
Eros, after its New York-listed shares slumped 44 percent last
week.
Wells Fargo downgraded Eros' New York shares to
"market-perform" saying that a conference call the Indian movie
producer had conducted with analysts on Friday morning had
failed to provide reassurance.
"We still came away feeling a bit confused so we're
downshifting into a wait-and-see mode," Wells Fargo said.
Eros enjoyed a hit this year with "Bajrangi Bhaijaan", a
comedy-drama about the return of a mute girl to Pakistan from
India that has earned 3.15 billion rupees ($48.50 million) so
far.
Eros' Mumbai-listed shares ended down 19.3 percent on
Monday, under-performing a 0.4 percent fall in the broader NSE
index .NSEI .
($1 = 64.9475 Indian rupees)
(Reporting by Rafael Nam, Shilpa Jamkhandikar; Additional
reporting by Karen Rebelo; Editing by Jacqueline Wong)
((rafael.nam@thomsonreuters.com; +9122-6180-7425; Reuters
Messaging: rafael.nam.thomsonreuters.com@reuters.net))
Keywords: INDIA EROS/