Eris Lifesciences Q1 Results Review - Inline; Strong Start To Business Integration: Prabhudas Lilladher

Prabhudas Lilladher Report

Eris Lifesciences Ltd.'s Q1 FY25 Ebitda was in line with our estimate (Rs 2.5 billion; 47% YoY). Eris has opted for inorganic route to diversify and scale up existing portfolio. This has been implemented without diluting margins. We expect margins to sustain at +35% as revenue scales up from recent acquisitions which is currently operating at sub optimal profitability.

Eris has multiple growth levers such as broad based offerings in derma segment, opportunities in cardio metabolic market with patent expirations and benefits of operating leverage, as revenue scales up from these acquisitions.

Our FY25 and FY26E Ebitda stands broadly unchanged while profit after tax for FY25 stand reduced by 8% due to higher tax. Our FY26E EPS broadly remain unchanged. We maintain ‘Buy’ rating with revised target price of Rs 1,250.

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