Buy Eris Lifesciences; target of Rs 850: Prabhudas Lilladher

Prabhudas Lilladher's research report on Eris Lifesciences

Eris Lifesciences (ERIS) reported moderate operating profit (up 5% YoY), due to higher promotional expenses from new launches. However, we believe benefits of operating leverage will play out, as revenue scales up from these launches. Further acquisition of Oaknet gives Eris an entry in the derma segment, currently operating at sub optimal profitability. Eris’s turnaround of Strides acquired portfolio provides comfort for similar execution. Further, the company continues to outperform cardio metabolic market (60% of its total revenues) which expects robust growth over next 3-4 years with wide patent expiration opportunities.

Outlook

We maintain our ‘BUY’ rating at TP of Rs850, valuing 16x EV/EBITDA on Sept FY24E.