In a bid to reassure investors following a slump in its New York and Mumbai-listed shares, Eros International Media (EROS.NS) said on Monday, 26 October, that the company had "strong" fundamentals. The slump was witnessed after an analyst raised questions about Eros' business operations.
Shares of Eros International Media, a producer and distributor of Indian movies, slumped as much as 20% in Mumbai trading. Its parent company, Eros International Plc (EROS.N), lost 16.6 in US trading on Friday, 23 October.
The slump 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. Wells Fargo called the occurrence to be a "red flag" for some investors, adding that it was not fully comfortable with so much revenue coming from outside India.
The company 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 websites that track app downloads.
In its India statement, Eros 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 as its New York-listed shares slumped 44% last week.
Wells Fargo downgraded Eros' New York shares to "market-perform" saying that a conference call to the Indian movie producer 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 added.
Eros enjoyed a hit this year with "Bajrangi Bhaijaan", a comedy-drama about a mute girl from Pakistan who crossed the border and entered India, that has earned Rs. 3.15 billion ($48.50 million) so far.
Eros' BSE-listed shares ended down 19.3% on Monday, under-performing a 0.4% fall in the broader Nifty.