Buy Eris Lifesciences; target of Rs 780: Prabhudas Lilladher

Prabhudas Lilladher's research report on Eris Lifesciences

Eris Lifesciences (ERIS) Q4FY23 reported EBITDA of Rs1.2bn (up 23% YoY) was largely in line with our estimate. OPM of 29.5% (down 220bps YoY) were weak given consolidation of new business. We expect margins to improve 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.

Outlook

We maintain our ‘BUY’ rating and TP of Rs780, valuing 14x EV/EBITDA on FY25E.

For all recommendations report, click here