We reduce our earnings estimate by 11% for FY23E due to increased revenue contrbution from consumer products and increase in MR count. 2QFY21 earnings were in-line with our estiamte led by growth in top brands and pick up in marketing acitivies. We believe 2HFY21E growth would be better than 1HFY21 as marketing acitivies are almost at pre-COVID levels and recent addition of new MRs will start contributing to revenues. ERIS plans to launch 7 new products in 2HFY21E, which we believe could be derma products. We continue to prefer ERIS as our top pick in mid-cap space due to 1) pure domestic play with insignificant regulatory and currency risk, 2) high contribution of chronic/sub-chronic (89% of revenue) products with steady demand structure, 3) strong balance sheet and 4) less dependenace on Chinese API and KSM.
OutlookWe rollover our valuation to FY23E (earlier FY22E) that leads to new TP to Rs671 (earlier Rs615) based on 22x(PE) of FY23E EPS of Rs31. We maintain ‘BUY’ (Unchanged).
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