Motilal Oswal's research report on Eris Lifesciences
The Dydrogesterone market is at an interesting phase, with an improvement in demand due to better access, affordability, and technical superiority over Progesterone. The initial response for ERIS' product (Drolute) has been encouraging, with sales of INR44m since its launch in Jan'22. We expect this product to aid 2-3% YoY growth for ERIS in FY23. While the Insulin market has been steady, with seven players in India till FY18, ERIS' Insulin product (Xsulin) marks the entry of the third new player since then. Given its enhanced product offering and brand recall in the Diabetes space, we expect ERIS to gain healthy traction in Xsulin in coming years. We expect 14.5% sales CAGR (including Oaknet Healthcare in FY22), led by the 41%/9% CAGR in new launches/base business over FY22-24. Oaknet will not only diversify its therapy base, but also enhance ERIS' prospects in Cosmetology and Women Healthcare.
Outlook
We value ERIS at 22x 12-month forward P/E to arrive at our TP of INR870. We remain positive on the stock on the back of launches in Anti-Diabetic and Women Health space, and increasing doctor connect in the Cardiology therapy. We maintain our Buy rating.
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