Buy Eris Lifesciences; target of Rs 1100: Prabhudas Lilladher

Prabhudas Lilladher's research report on Eris Lifesciences

Eris Lifesciences (ERIS) in its analyst meet highlighted scale up in its recent acquired Derma portfolio, doctor engaging initiatives, revenue aspiration of Rs50bn for FY29 and steps to achieve same along with rationale of Swiss parental acquisition. We expect margins to sustain at 35-36%, as revenue scales up from recent acquisitions which is currently operating at sub optimal profitability. The company has multiple growth levers 1) broad based offerings in derma segment 2) opportunities in cardio metabolic market with patent expirations and 3) benefits of operating leverage, as revenue scales up from these acquisitions.

Outlook

We expect Revenue/EBITDA CAGR of ~20%/25% over FY23-26E. Maintain ‘BUY’ rating with TP of Rs1,100 valuing at 15x EV/EBITDA on FY26E.

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