Eris Lifesciences Q4 Results Review - Healthy Execution, Addition Of Business Drive The Quarter: Motilal Oswal

Motilal Oswal Report

Eris Lifesciences Ltd. delivered better-than-expected revenue, while it missed on earnings due to a lower-than-expected Ebitda margin and a higher interest outgo. Eris clocked organic revenue growth of 15%/10% YoY in Q4 FY24/FY24.

We maintain our estimates for FY25/FY26. We Eris at 23 times 12 months forward earnings to arrive at our target price of Rs 950.

We factor in 21% earnings growth over FY24-26, led by:

1. an improving traction in dermatology, anti-diabetes, and women healthcare,

2. integration of the recently acquired business (Swiss Parenterals/Biocon’s branded formulation business), and

3. reduction in financial leverage from operating cash flows.

However, the current valuation adequately factors in the upside in earnings. Reiterate Neutral.

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