Guess who's smiling to the bank on Agneepath's success

The blockbuster success of Agneepath has not only given a grand start to the Bollywood industry but Eros International as well, which has the rights to distribute the film overseas. Initial numbers for the movie have started to trickle in and they are quite impressive.

Eros released Agneepath in 337 theatres internationally and the film grossed Rs 16 crore at the opening weekend itself.

In a release to the BSE, Eros said Agneepath ranked among the top 10 in the UK box office. In the US too, it grossed $1.3 million in the first four-day weekend (the movie released on January 26, a Thursday).

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Not surprisingly, Eros’ shares are up 2.75 percent at Rs 205.60.

The success of Agneepath is not the only good news for the company. Kamal Jain, chief financial officer, Eros, told ET Now in an interview that out of the top 10 films of the first nine months of financial year 2012 (April-March), five belong to Eros: Ready, Ra.One, Zindagi Na Milegi Dobara, Rockstar and Murder 2.

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The company has also lined up 75 films for this calendar year, including Agent Vinod, Housefull 2, Kunal Kohli’s yet-untitled film starring SHahid Kapoor and Priyanka Chopra and Rajnikanth’s Rana.

Given the company’s track record for churning out hits, Sharekhan, a local brokerage, has a ‘buy’ rating on the stock with a target price of Rs 298. The rating is supported by a growing acceptance of digitisation of film projection, which reduces the time for film release and distribution and also expands reach.

The compulsory digitalisation of cable network by December 2014 will act as a further catalyst for demand of films among broadcasters, which would help in raising the prices of satellite rights in coming years.

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Eros will gain here too: it has a library of about 1,100 films, which will make it a key beneficiary of higher satellite rights prices.

Sanjeev Hota, analyst, Sharekhan told Firstpost, “The company has a very strong business model under which it holds the distribution and intellectual property rights as well. Its pipeline of movies is also very strong for the next year.”

The company also pre-licences other things and can generate revenues from a movie from platforms other than the box office. Even if box office collections are lower than expected, it can make money via satellite rights, music rights etc. Box office collections, in fact, account for just 40-50 percent of the total revenues of Eros.

All things considered, Eros looks like a sure hit for investors.