Page 5 - 1797_Value Plus Aug 2016

Shemaroo Entertainment Ltd. FUNDAMENTAL

BUY Target Price Rs 392 STOCK

Value Parameters 532528 Company Overview
BSE Code SHEMAROO
NSE Symbol Shemaroo Entertainment was originally
CMP (As on 01stAug, 2016) Rs 325 incorporated as a private limited company under
Face Value Rs 10 the Companies Act, 1956 on December 23, 2005
52 Week High/Low 375/202 with the name Shemaroo Holdings Private Limited.
Market Cap (Rs cr) On May 28, 2008, the name of the company was
EPS (Rs) (FY16) 882 changed to Shemaroo Entertainment Private
PE ratio (x) 20.4 Limited. Established as a book circulating library,
14.5 today the company is at the forefront of the
dynamic and growing Indian entertainment
Shareholding Pattern % (Jun’ 16) industry established as an integrated media content
house with activities across content acquisition,
19.11 value addition to content and content distribution.
2.7 Together with film the brand "Shemaroo" is
synonymous with quality entertainment.
12.37
Investment Rationale
65.82
§ Shemaroo has grown multi-fold over the years
Promoter FII DII Others by developing excellent relationships with
producers and also the broadcasting networks,
thereby becoming the largest organized player in
a historically fragmented industry.

§ Growing technology has remained a catalyst
igniting several new innovations which opened
excess revenue generation opportunities. Being
equipped with a robust content library and
wide distribution presence the company is well
positioned to tap these opportunities and improve
profitability.

§ The current content library that company owns
stands at around 3,000 plus titles giving them
a competitive advantage as the number of
participants in the industry are few and Shemaroo
holding a major market share enjoys the dominant
position.

§ Rising share of robustly growing digital media
to augment profitability for the company going
ahead.

Valuations

At CMP of Rs 325 company trades at a P/E
multiple of 10.8 (x) its FY18 estimates. We have
valued the stock at its FY18E forward P/E of 13(x)
and arrived at a fair value of Rs 392 per share.
We initiate coverage with “BUY” rating on the
company.

5 ARIHANT CAPITAL ¡ AUGUST 2016