Neutral Eris Lifesciences; target of Rs 1270: Motilal Oswal

Motilal Oswal recommended Neutral rating on Eris Lifesciences with a target price of Rs 1270 in its research report dated February 04, 2025.

Broker Research

February 06, 2025 / 13:21 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Eris Lifesciences

Eris Lifescience’s (ERIS) 3QFY25 performance came in below our estimates. Lower-than-expected revenue growth led to lower operating leverage, which affected the overall performance. The base business witnessed some recovery in growth owing to new launches and price hikes. We reduce our FY25 EPS estimate by 4% (factoring in lower sales from biologics business) and largely maintain our estimates for FY26/FY27. We value ERIS at 25x 12M forward earnings to arrive at a TP of INR1,270. ERIS is building the GLP1 franchise by ensuring the sourcing of API for synthetic peptide and subsequently conducting clinical trials/enhancing manufacturing capacity for recombinant semaglutide. It continues to launch combination products in the SGLT2 space. Considering this and a reduction in financial leverage, we estimate a CAGR of 16%/42% in EBITDA/earnings over FY25-27. However, the current valuation leaves limited upside. Reiterate Neutral.

Outlook

We reduce our FY25 EPS estimate by 4% (factoring lower sales from biologics business) and largely maintain our estimates for FY26/FY27. We value ERIS at 25x 12M forward earnings to arrive at a TP of INR1,270.

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