Shares in Eros International Media staged a smart recovery after falling as much as 20 per cent on Monday. A 17% recovery in the share price of its parent company, Eros International PLC on the New York Stock Exchange after a near 45% slump in the last few days aided the stock's recovery.
The shares of the parent company have been falling on the NYSE after Wells Fargo downgraded it to 'market perform', raising questions about the New York Stock Exchange-listed company's revenue from UAE business.
However, the company has clarified in a statement saying: With reference to letters received from BSE & NSE with regards to article appearing in "The Economic Times" dated October 25, 2015 captioned "Eros International under Wells Fargo's scanner, stock downgraded", We believe that the recent movement in share price volatility at our NYSE listed parent level and today at Indian stock exchanges are based on speculative media reports.
"Analysts downgrade or upgrade stocks regularly and that as such is not a cause for concern. Note that Wells Fargo did not revise down their earnings estimate for the quarter or the year and the price target is $22, well above the price the stock was trading on the date it was published. Another analyst from Macquarie, Tim Nollen, published a very positive report and maintained outperform rating with a $25 price target, on the same day as the Wells Fargo report on Friday 23rd October."
The press release further added: "We would like to reassure our shareholders that there has been no material change to the previously announced strong fundamentals of the company. We continue to be market leaders in the Indian film industry with a dominant market share of the global Indian box office. Our library of over 2,000 films continues to be a unique competitive advantage which we monetize in conjunction with our new release slate of 65-70 films comprising of Hindi and regional languages each year, across theatrical, television and digital and ancillary distribution platforms which constitute our diversified revenue streams."