Looking for a growth stock? Pay attention to Eros International Media
05-06-2015 • About Eros International Media (
$EROSMEDIA) • By InTwits
Pay attention to Eros International Media as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Eros International Media showed fast growth in the last financial year. The company's revenue surged on 25.3% in FY2015. At the same time Eros International Media well managed its profitability and also showed EBITDA growth of 13.3% for the same period.
If we look for the longer period the company showed fast revenue growth of 14.6% from FY2012 to FY2015 annually. EBITDA surged on 14.6% from FY2012 to FY2015 annually.
Eros International Media ($EROSMEDIA) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 7,070 | 9,439 | 10,680 | 11,347 | 14,212 |
|---|
| Revenue growth, % | | 33.5% | 13.1% | 6.2% | 25.3% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 4,092 | 5,776 | 7,013 | 7,671 | 8,693 |
|---|
| EBITDA growth, % | | 41.2% | 21.4% | 9.4% | 13.3% |
|---|
| EBITDA margin, % | 57.9% | 61.2% | 65.7% | 67.6% | 61.2% |
|---|
| Net Income | 1,172 | 1,478 | 1,545 | 1,997 | 2,471 |
|---|
| Net Income margin, % | 16.6% | 15.7% | 14.5% | 17.6% | 17.4% |
|---|
| |
| CAPEX | 5,477 | 5,300 | 7 | 3 | 35 |
|---|
| CAPEX/Revenue, % | 77.5% | 56.1% | 0.0693% | 0.0247% | 0.246% |
|---|
| Debt | 2,751 | 4,481 | 4,032 | 4,332 | 4,915 |
|---|
| Cash | 1,361 | 1,353 | 500 | 1,393 | 1,588 |
|---|
| Net Debt/EBITDA | 0.3x | 0.5x | 0.5x | 0.4x | 0.4x |
|---|
| |
| ROIC, % | 21.0% | 18.4% | 15.2% | 17.6% | 17.7% |
|---|
| ROE, % | 25.8% | 19.6% | 17.0% | 18.2% | 18.4% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. If we look for the longer period EBITDA margin didn't change on 0 pp from 61.2% in FY2012 to 61.2% in FY2015.
Eros International Media shows attractive ROIC at 17.7% for the last 12 months which assumes stable development model. Three years ago it was a bit higher at 18.4%. Average ROIC for the last three years was 16.8%.
The company's Net Income margin decreased slightly on 0.200 pp from 17.6% to 17.4% in FY2015. In the longer period Eros International Media showed fast Net Income margin growth of 1.70 pp from 15.7% in FY2012 to 17.4% in FY2015.
Eros International Media operates at ROE of 18.4%. It's average ROE for the last three years was 17.8%.
Capital expenditures (CAPEX)
In FY2015 Eros International Media had CAPEX/Revenue of 0.246%. Eros International Media showed big decline in CAPEX/Revenue of 55.9 pp from 56.1% in FY2012 to 0.246% in FY2015. Average CAPEX/Revenue for the last three years was 0.113%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.4x Net Debt/EBITDA. In the last 3 years leverage dropped on 0.16x from 0.54x in FY2012 to 0.38x in FY2015.
Valuation vs. comparable companies
The company trades at 5.1x EV/EBITDA which is 63.6% lower than 13.9x Movies & Entertainment industry avearge calculated based on 56 companies. The market closed today at 16.5x P/E for Eros International Media which is 6.49% higher than 15.5x Movies & Entertainment peer group avearge calculated on the basis of 2 companies.
Peers in Movies & Entertainment
Below you can find Eros International Media benchmarking vs. other companies in Movies & Entertainment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Shemaroo Entertainment ($SHEMAROO) | | 15.0% | 18.0% | 23.2% | 21.7% |
| Saregama India ($SAREGAMA) | | 16.9% | 16.1% | -4.6% | 5.1% |
| Dq Entertainment (International) ($DQE) | | 9.3% | 1.0% | 4.5% | -40.6% |
| Sri Adhikari Brothers Television Network ($SABTN) | | 167.5% | 22.2% | 11.9% | -42.6% |
| Mukta Arts ($MUKTAARTS) | | 5.0% | 22.4% | 8.2% | -58.4% |
| |
|---|
| Median (5 companies) | -86.1% | 15.0% | 17.0% | 9.5% | -40.6% |
|---|
| Eros International Media ($EROSMEDIA) | | 33.5% | 13.1% | 6.2% | 25.3% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Picturehouse Media ($PICTUREHS) | | | | | 54.1% |
| Dq Entertainment (International) ($DQE) | 36.4% | 41.8% | 48.8% | 40.2% | 50.5% |
| Sri Adhikari Brothers Television Network ($SABTN) | 2.1% | 7.5% | 24.7% | 27.5% | 43.7% |
| Mukta Arts ($MUKTAARTS) | 9.2% | 6.4% | 4.0% | 1.0% | 29.8% |
| Shemaroo Entertainment ($SHEMAROO) | 22.4% | 28.4% | 27.3% | 24.8% | 27.1% |
| |
|---|
| Median (8 companies) | 9.2% | 15.0% | 24.8% | 24.8% | 28.4% |
|---|
| Eros International Media ($EROSMEDIA) | 57.9% | 61.2% | 65.7% | 67.6% | 61.2% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sri Adhikari Brothers Television Network ($SABTN) | 119.1% | 28.9% | 5.1% | 9.4% | 126.7% |
| Saregama India ($SAREGAMA) | 4.7% | 2.7% | 3.4% | 4.3% | 1.8% |
| Shemaroo Entertainment ($SHEMAROO) | 1.2% | 2.3% | 0.9% | 0.7% | 0.7% |
| Dq Entertainment (International) ($DQE) | 78.6% | 5.5% | 2.0% | 0.0% | 0.6% |
| Picturehouse Media ($PICTUREHS) | | | | | 0.5% |
| |
|---|
| Median (5 companies) | 18.1% | 5.5% | 3.4% | 2.5% | 0.7% |
|---|
| Eros International Media ($EROSMEDIA) | 77.5% | 56.1% | 0.1% | 0.0% | 0.2% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Shemaroo Entertainment ($SHEMAROO) | 17.2% | 23.5% | 22.9% | 21.0% | 21.8% |
| Picturehouse Media ($PICTUREHS) | 23.0% | 15.6% | 17.3% | 16.9% | 12.0% |
| Sri Adhikari Brothers Television Network ($SABTN) | -4.8% | -4.4% | 7.1% | 10.6% | 4.8% |
| Saregama India ($SAREGAMA) | -10.6% | 4.1% | 1.7% | 8.2% | 3.4% |
| Dq Entertainment (International) ($DQE) | 9.1% | 9.4% | 9.3% | 6.2% | 3.4% |
| |
|---|
| Median (13 companies) | 9.1% | 2.1% | 7.3% | 8.2% | 4.8% |
|---|
| Eros International Media ($EROSMEDIA) | 21.0% | 18.4% | 15.2% | 17.6% | 17.7% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Picturehouse Media ($PICTUREHS) | -1.1x | 6.2x | 3.7x | 3.4x | 7.0x |
| Dq Entertainment (International) ($DQE) | 1.7x | 1.8x | 1.9x | 2.8x | 5.0x |
| Sri Adhikari Brothers Television Network ($SABTN) | 112.5x | 16.1x | 3.5x | 2.5x | 3.0x |
| Shemaroo Entertainment ($SHEMAROO) | 2.5x | 1.7x | 1.9x | 2.3x | 1.2x |
| Saregama India ($SAREGAMA) | 10.1x | 2.4x | 3.1x | 0.2x | 0.2x |
| |
|---|
| Median (7 companies) | 2.5x | 2.4x | 2.7x | 2.3x | 1.2x |
|---|
| Eros International Media ($EROSMEDIA) | 0.3x | 0.5x | 0.5x | 0.4x | 0.4x |
