Buy Eris Lifesciences; target of Rs 1975: Prabhudas Lilladher

buy

Prabhudas Lilladher's research report on Eris Lifesciences

Eris Lifesciences’ (ERIS) Q1FY26 EBITDA was broadly in line with our estimate (Rs2.75bn; up 11% YoY). Though Q1FY26 revenue growth (up 7.4% YoY) was muted, we see pick up in coming quarters as insulin shortages stabilize, export pick up and likely additional market share gain from human insulin market. Eris has opted for inorganic route to diversify and scale up existing portfolio. This has been implemented without diluting margins. We expect margins to scale up from the current level of 35% in FY25 as revenue scales up from recent acquisitions, which are currently operating at sub-optimal profitability. The company has multiple growth levers such as broad-based offerings in the derma segment, tapping GLP-1 market, demand supply mismatch in insulin segment, creating large injectable franchise across India and RoW market and benefits of operating leverage. Our FY26 and FY27E EBITDA broadly remains unchanged.

Outlook

We maintain ‘BUY’ rating with revised TP of Rs1,975 (valuing at 20x EV/EBITDA on FY27E vs 18x earlier).

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Eris Lifesciences - 06082025 - prabhu