Buy call on eris life sciences

During its analyst meet, Eris Lifesciences (ERIS) highlighted plans to scale up its recently acquired Derma portfolio, along with initiatives to engage doctors effectively. The company set a revenue aspiration of Rs. 50 billion for FY29 and outlined steps to achieve this target, including the rationale behind the acquisition of its Swiss parent company.

It is expected that margins will sustain at 35-36% as revenue scales up from recent acquisitions, which are currently operating at suboptimal profitability. Eris Lifesciences has identified multiple growth opportunities, including broadening its offerings in the derma segment, capitalizing on opportunities in the cardio-metabolic market due to patent expirations, and leveraging operating leverage as revenue scales up from these acquisitions.

The projected Revenue/EBITDA Compound Annual Growth Rate (CAGR) is approximately 20%/25% over FY23-26E. A ‘BUY’ rating is maintained with a Target Price (TP) of Rs. 1,100, valuing the company at 15 times EV/EBITDA on FY26E."