Eros International Media Net Income dropped on 13.3% and EBITDA Margin showed almost no change
27-05-2016 • About Eros International Media (
$EROSMEDIA) • By InTwits
Eros International Media reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Eros International Media is a fast growth stock: FY2016 revenue growth was 11.4%, 5 year revenue CAGR was 17.5% at FY2016 ROIC 14.1%
- Eros International Media has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.4%. At the same time it's in pair with industry average of 1.2%
- CAPEX is quite volatile: ₹62m in FY2016, ₹35m in FY2015, ₹3m in FY2014, ₹7m in FY2013, ₹5,300m in FY2012
- The company has highly profitable business model: ROIC is 14.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 11.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.2 pp from 0.20% to 3.4% in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2014 at 67.6% and was declining since that time.
Net Income margin decreased on 3.9 pp from 17.4% to 13.5% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Eros International Media had CAPEX/Revenue of 0.39%. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 0.22%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2014 at 0.025% and was growing since that time.
Return on investment
The company operates at good ROIC (14.1%) and ROE (13.2%). ROIC decreased on 3.6 pp from 17.7% to 14.1% in FY2016. ROE decreased on 5.2 pp from 18.4% to 13.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 0.4x. Net Debt / EBITDA increased on 0.020x from 0.4x to 0.4x in FY2016. Debt dropped on 14.3% while cash dropped on 78.9%. During the last 5 years Net Debt/EBITDA bottomed in FY2015 at 0.4x.
Eros International Media has short term refinancing risk: cash is only 10.6% of short term debt.
Valuation and dividends
Eros International Media's trades at EV/EBITDA 2.2x and P/E 7.9x while industy averages are 17.8x and 21.9x. Eros International Media's EV/(EBITDA-CAPEX) is 2.2x with the industry average at 22.8x.
Management team
Dinesh Modi is a Eros International Media's CFO. Dinesh Modi has spent 5 years at the company.
Financial and operational results
Eros International Media ($EROSMEDIA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,439 | 10,680 | 11,347 | 14,212 | 15,827 | 11.4% |
| EBITDA | 5,776 | 7,013 | 7,671 | 8,693 | 9,629 | 10.8% |
| Net Income | 1,478 | 1,545 | 1,997 | 2,471 | 2,142 | -13.3% |
Balance Sheet
|
|---|
| Cash | 1,353 | 500 | 1,393 | 1,588 | 334 | -78.9% |
| Short Term Debt | 3,356 | 2,731 | 3,359 | 3,961 | 3,148 | -20.5% |
| Long Term Debt | 1,125 | 1,301 | 973 | 953 | 1,066 | 11.8% |
Cash flow
|
|---|
| Capex | 5,300 | 7 | 3 | 35 | 62 | 78.5% |
Ratios
|
|---|
| Revenue growth | 33.5% | 13.1% | 6.2% | 25.3% | 11.4% | |
| EBITDA growth | 41.2% | 21.4% | 9.4% | 13.3% | 10.8% | |
|
|---|
| EBITDA Margin | 61.2% | 65.7% | 67.6% | 61.2% | 60.8% | -0.3% |
| Net Income Margin | 15.7% | 14.5% | 17.6% | 17.4% | 13.5% | -3.9% |
| CAPEX, % of revenue | 56.1% | 0.1% | 0.0% | 0.2% | 0.4% | 0.1% |
|
|---|
| ROIC | 18.4% | 15.2% | 17.6% | 17.7% | 14.1% | -3.6% |
| ROE | 19.6% | 17.0% | 18.2% | 18.4% | 13.2% | -5.2% |
| Net Debt/EBITDA | 0.5x | 0.5x | 0.4x | 0.4x | 0.4x | 0.0x |
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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Saregama India ($SAREGAMA) | - | 16.1% | -4.6% | 5.1% | 18.7% |
| Shemaroo Entertainment ($SHEMAROO) | - | 18.0% | 23.2% | 21.7% | 16.2% |
| Media Matrix Worldwide ($MMWL) | - | - | - | - | - |
| Tips Industries ($TIPSINDLTD) | - | - | - | - | -33.1% |
| Mukta Arts ($MUKTAARTS) | - | 22.4% | 8.2% | -58.4% | -36.6% |
| |
|---|
| Median (5 companies) | 31.4% | 17.0% | 9.5% | -17.8% | -8.5% |
|---|
| Eros International Media ($EROSMEDIA) | - | 13.1% | 6.2% | 25.3% | 11.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Picturehouse Media ($PICTUREHS) | - | - | - | 54.1% | - |
| Dq Entertainment (International) ($DQE) | 41.8% | 48.8% | 40.2% | 50.5% | - |
| Sri Adhikari Brothers Television Network ($SABTN) | 7.5% | 24.7% | 27.5% | 43.7% | - |
| Mukta Arts ($MUKTAARTS) | 6.4% | 4.0% | 1.0% | 29.8% | 17.3% |
| Shemaroo Entertainment ($SHEMAROO) | 28.4% | 27.3% | 24.8% | 27.1% | 29.4% |
| |
|---|
| Median (10 companies) | 15.0% | 24.8% | 24.8% | 22.6% | 17.3% |
|---|
| Eros International Media ($EROSMEDIA) | 61.2% | 65.7% | 67.6% | 61.2% | 60.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sri Adhikari Brothers Television Network ($SABTN) | 28.9% | 5.1% | 9.4% | 126.7% | - |
| Prime Focus ($PFOCUS) | 24.3% | 19.8% | - | 20.8% | - |
| Saregama India ($SAREGAMA) | 2.7% | 3.4% | 4.3% | 1.8% | 3.3% |
| Shemaroo Entertainment ($SHEMAROO) | 2.3% | 0.9% | 0.7% | 0.7% | 1.3% |
| Dq Entertainment (International) ($DQE) | 5.5% | 2.0% | 0.0% | 0.6% | - |
| |
|---|
| Median (6 companies) | 5.5% | 3.4% | 2.5% | 1.3% | 3.2% |
|---|
| Eros International Media ($EROSMEDIA) | 56.1% | 0.1% | 0.0% | 0.2% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shemaroo Entertainment ($SHEMAROO) | 23.5% | 22.9% | 21.0% | 21.8% | 21.3% |
| Picturehouse Media ($PICTUREHS) | 15.6% | 17.3% | 16.9% | 12.0% | - |
| Sri Adhikari Brothers Television Network ($SABTN) | -4.4% | 7.1% | 10.6% | 4.8% | - |
| Saregama India ($SAREGAMA) | 4.1% | 1.7% | 8.2% | 3.4% | 5.1% |
| Dq Entertainment (International) ($DQE) | 9.4% | 9.3% | 6.2% | 3.4% | - |
| |
|---|
| Median (13 companies) | 2.1% | 7.3% | 8.2% | 4.1% | 5.1% |
|---|
| Eros International Media ($EROSMEDIA) | 18.4% | 15.2% | 17.6% | 17.7% | 14.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Picturehouse Media ($PICTUREHS) | 6.2x | 3.7x | 3.4x | 7.0x | 0.0x |
| Dq Entertainment (International) ($DQE) | 1.8x | 1.9x | 2.8x | 5.0x | - |
| Prime Focus ($PFOCUS) | 1.9x | 3.5x | - | 3.6x | - |
| Sri Adhikari Brothers Television Network ($SABTN) | 16.1x | 3.5x | 2.5x | 3.0x | - |
| Shemaroo Entertainment ($SHEMAROO) | 1.7x | 1.9x | 2.3x | 1.2x | 1.8x |
| |
|---|
| Median (9 companies) | 2.4x | 2.7x | 2.3x | 1.2x | 0.0x |
|---|
| Eros International Media ($EROSMEDIA) | 0.5x | 0.5x | 0.4x | 0.4x | 0.4x |
