EROS’s Mysterious UAE Sales Compound Worst-Case Scenario

Investors should compare the revenue representations EROS International Plc [NYSE Trading Symbol: EROS, $18.05] made during their Investor Day on October 13, 2015 to those the company just filed in their year-end audited results.

In the infamous clip below, investors can observe Jyoti Deshpande’s, EROS’s CEO’s, response to being questioned about the reported growth of sales in the United Arab Emirates (UAE). Since 2012, sales in the UAE increased by 1,550.8% to $103 million in 2015. These sales rivaled that of India, which is obviously the largest for EROS’s product. A spreadsheet analysis of these figures is available here.

This unparalleled growth left investors with numerous concerns, which caused EROS’s stock price to drop from a high of 39.01 on August 14, 2015 to a low of 6.84 on November 13, 2015.

EROS’s latest 20-F filing suddenly shows that UAE sales dropped by 40.69% to $62 million.

Why do the UAE Sales vary so much year to year? Why was there a sudden drop in UAE sales after such unprecedented growth?

EROS leaves these questions unanswered, but these are not the only questions investors that should raise investors’ concerns.  In a separate report, asensio.com reveals serious problems with EROS’s claims to have achieved positive Free Cash, lowered its account receivables from operating cash flow and reduced debt. All these questions add weight to EROS worst-case scenario.