Accumulate Eris Lifesciences; target of Rs 459: Prabhudas Lilladher

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26 Aug, 2025 12:21

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With better traction in CNS portfolio (acquired from Strides) and visibility in core portfolio, Eris sales, EBITDA and PAT grew by 8%, 9% and 9% respectively. EBITDA margin was 37.6%, largely similar with 30 bps expansion YoY. Adjusted for FDC ban, sales growth was 10.4% YoY and contribution from the top 10 products stood at 63% of the total sales. Eris chronic and sub-chronic segment grew at 11.4% YoY versus 10.6% of the Indian pharma market. Whilst its acute therapy portfolio declined 1% versus IPM growth of 12% YoY. NLEM products contributed 8.5% of revenues. With foray in Derma segment and focus on key brands in CVS and diabetes, Eris formed new cardio-metabolic division with addition of 300 people. With 58% contribution of Guwahati plant in revenues, ERIS guided for more capacity utilisation including producitons of Strides portfolio.

This helps for better tax management with guidance of 8-10% in FY20E. Guwahati remains to be tax benefit zone till FY24E. With better traction of new products/brands, incremental Rx and net cash position, we expect stronger cash flows and higher return ratios. With stability of sales from the acquired portfolios and better visibility of earnings, we maintain 'Accumulate' and retain TP at Rs459 We maintian 'Accumulate' recommendation.

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