Eris Lifesciences soars 4% as HDFC MF picks up a stake

Most brokerages also have a positive view of Eris thanks to its recent acquisitions, strong portfolio and robust growth prospects.

Shares of Eris Lifesciences surged 4 percent in the early trade on July 7, a day after domestic institutional investor HDFC Mutual Fund picked up almost 1 percent stake in the pharmaceutical company.

On July 6, HDFC Mutual Fund bought 13.5 lakh equity shares, or a 0.99 percent stake, in the company through open market transactions at an average price of Rs 697 a share, amounting to Rs 94.09 crore.

HDFC MF likely picked up the stake sold by investor Rakesh Shah. The individual investor sold 27 lakh shares at the same price. Following the stake sale, Shah's shareholding in the firm has come down to 9.55 percent from 11.53 percent at the end of the March quarter.

At 9.35 am, Eris Lifesciences was trading 2.64 percent higher at Rs 724.65 on the National Stock Exchange.

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Eris Lifesciences has done a slew of acquisitions in recent quarters, mostly in the dermatology segment which has improved its growth prospects. Brokerage firm Prabhudas Lilladher expects margins for the pharma company to improve as revenue scales up from recent acquisitions which operating at sub-optimal profitability.

"The company has multiple growth levers such as broad-based offerings in the derma segment, opportunities in cardio-metabolic market with patent expirations and benefits of operating leverage, as revenue scales up from these acquisitions," the firm said in a recent report.

Prabhudas Lilladher has a "buy: call on the stock, with a price target of Rs 780.

Motilal Oswal Financial Services also remains positive on the company as it believes the addition of complimentary brands in medical and cosmetic dermatology from Glenmark Pharma and Dr Reddy’s Lab is expected to enhance its derma offerings. The brokerage also rolled out a "buy" recommendation for the stock with a price target of Rs 720.

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