Eros International Media 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 per cent on BSE on Monday. Its parent company, Eros International Plc , lost 16.6 per cent in US 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 19.11 percent on Monday, under-performing a 0.4 per cent fall in the broader NSE index.