Buy Eris Lifesciences; target of Rs 686: Bonanza

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26 Aug, 2025 12:21

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Recently, the stock price of Eris Lifesciences Ltd. (Eris) corrected by ~22 from 52-week high of Rs.728 as the company has reported below expected numbers in the recent quarters.  Eris focuses on lifestyle related disorders, which are chronic in nature. Hence, the main target of the company is specialist and super specialist doctors. It is mainly into select therapeutic areas, such as, CVS, anti-diabetics, vitamins, gastroenterology, anti-infectives and gynecology. In FY17, chronic segment generated 66% of total revenues. Even in the acute segment (34% of total revenues), the company focuses on categories that are connected to lifestyle disorders and required to be prescribed over an extended period. Eris has registered an impressive 17% CAGR revenues growth during FY13-17, however, growth in the chronic category was higher at 29% over FY13-17. According to Indian Pharmaceutical Market (IPM) report in March 2017, Eris was the fastest growing company among top 25 companies in terms of revenues and its rank has also improved to 20th out of 377 companies in the chronic category in FY17, from 26th in FY13.

With fastest growing company, focuses on lifestyle related disorders, established itself as a key player in leading chronic therapy areas, majority of its prescriptions from molecules that are in the growth phase, relies mainly on prescriptions by specialists and super specialists and improvement in EBITDA margin on back of better product mix, we value Eris at 31.50x FY19E EPS of Rs.21.80 to arrive at target price of Rs.686.00, an upside of ~22%.

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