Sep 14, 2017

Shamaroo Entertainment - Long - Medium Term Brief Investment Review

Shamaroo Entertainment - CMP 360
Company is into film aggregation and monetisation through tradition media and New media like You Tube with New Media revenue growing over 35% share of revenue of 24%. Company has increase its investment in films though increase in Inventory of longer duration right.
Company came out with inline number in Q1 post impact of Demonetisation in previous 2 quarter. In Q1 again inventory increased by 75cr but management clarified that this Inventory is mainly of regular business and not increase in Investment as such will correct over coming quarters. Company was into increasing its Investment portfolio in films since last 3-4 years and was expected to come out of its Investment phase in the current year which will help it to generate free cash flow.

Management has given guidance of FY 18 closing inventory to be lower than FY17 Inventory which indicate Investment phase is over and company can start generating free cash flow which can rerate the stock. Stock is trading at PE of 12x. Outlook Positive.
We recommend buy for medium and long term as well. And expect at least 100% return in 1-3 years.

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