Eros Intl management short of explanations; avoid stock: Deepak Shenoy

In a chat with ET Now, Deepak Shenoy, Founder, Capital Mind, talks about pharma stocks following the recent clampdown from the US drug regulator.

ET Now: A lot of people like picking up falling knives, but Eros International Media is falling thick and fast. It fell another 10 per cent in pre-open trade on Monday. Could it cut your hand if you try to pick it?

Deepak Shenoy: Actually the problem is, the stock is no more just an Indian stock. It is more like an Indian company, which has subsidiaries in the British Virgin Islands or a couple of other non-Indian territories. The US parent has operations in Dubai and couple of other places and the company does not have an easy balance sheet to analyse. We have been trying to look at it to see if it is a falling knife or it is it just a temporary dip. But the answer at this point is not very clear.

There are a lot of inter-subsidiary transactions that happened; there are a lot of things that are remained unexplained. We could say that the questions that were raised were raised by short sellers, but sometimes short sellers do raise very pertinent questions about economics and also about financials. Some of them are valid. I hope the management manages to address them. But at this point in time, the management's response has been short of expectations. To be honest, I would not like buy the stock at present.