Buy Eris Lifesciences; target of Rs 870: Motilal Oswal

Motilal Oswal's research report on Eris Lifesciences

ERIS delivered an operationally inline 4QFY22. It ended the second consecutive year with earnings growth in the a healthy teens compared to stable earnings over FY18-20. The acquisition of Oaknet Healthcare (Oaknet) enables ERIS to add a Dermatology franchise, expand into the Cosmetology space, and improve synergy in the Women's Healthcare segment. -

Outlook

We tweaked our FY23/FY24 EPS estimate by (3%)/2% to factor in: a) addition of the Oaknet business, b) scale-up in already launched products (Drolute, Xsulin, Zomelis, Gluxit) , c) strong pace of launches over the next 12-15 months, and d) upcoming promotional expenses. We continue to value ERIS at 22x 12-month forward earnings to arrive at a TP of INR870.