Eris Lifesciences (ERIS) Q2FY24 reported healthy EBITDA of Rs1.8bn (up 21% YoY) with sharp improvement in OPM at 35.8% (up 300bps YoY). We expect margins to sustain as revenue scales up from recent acquisitions which is currently operating at sub optimal profitability. The company has multiple growth levers such as broad based offerings in derma segment, opportunities in cardio metabolic market with patent expirations and benefits of operating leverage, as revenue scales up from these acquisitions.
OutlookWe maintain our ‘BUY’ rating with revised TP of Rs1,050 (Rs910 earlier), valuing 16x EV/EBITDA on Sept 2025E as we roll forward.
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