Maybank Kim Eng refutes manipulation of accounts by Eros

MUMBAI: Maybank Kim Eng, a Malaysian based investment house said that firm disagrees with allegations of accounting manipulation by anonymous posts on social media against Eros Plc and Eros India. The brokerage believe that the company’s business position and fundamentals are strong, but the near term overhang may remain until parent EROS Plc generates free cash flow (FCF), buys back shares or monetizes part of EROS NOW.

Maybank Kim Eng said despite the recent stock price crash, EROS continues to remain strong and the company has clarified that its film slate for next two years is fully funded. After a 51% EPS increase in first half, its poised for a strong second half supported by the release of big movies, such as "Bajirao Mastani", "Dictator", "Sardar Gabar Singh" and "24". Moreover, its FY17 pipeline is quite solid in both hindi and regional films, and finalization of fee sharing with EROS NOW will be another catalyst for EROS India in FY17.

The brokerage house said stock recovery will be slow but sure EROS India’s stock mirrored the capitulation in its parent’s stock price in the past 40 days. This extraordinary phase is over as the company clarified rumours against reality on its receivables, film count, and EROS NOW users.