Eris Lifesciences Ltd is the only publicly listed Indian pharmaceutical company with a pure-play domestic branded formulations business model. Established in 2007, Eris has quickly become one of the youngest companies to make it to the IPM Top-25. Their business ethos is built upon two core principles: leveraging cutting-edge science to bring evidence-based therapies to the market and empowering patients to take control of their diagnoses and lives through patient care initiatives. Since its inception, Eris has been primarily focused on developing therapies for chronic and sub-chronic lifestyle-related conditions. They have established themselves as a fully-integrated pan-India business, with a strong emphasis on collaborating with high-end super-specialist doctors and consulting physicians. Notably, Eris recorded revenues exceeding INR 1,200 crore for the fiscal year ending in March 2021.
Eris Lifesciences continues to lead in generating actionable medical evidence through notable initiatives like the India Heart Study (IHS) and India Diabetes Study (IDS). These studies are at the forefront of creating previously unknown bodies of knowledge, paving the way for improved health management and treatment outcomes.
Eris reported a revenue growth of 31.7% compared to the previous year and was in line with market expectations. The company’s strong performance was driven by growth in chronic therapies and Oakanet consolidation. EBITDA grew 22.7% year-on-year but decreased by 13.3% quarter-on-quarter. Operating profit margin contracted due to increased expenses. Net income declined by 23.1% year-on-year and 38.7% quarter-on-quarter, primarily due to subdued operating performance. The company achieved organic growth in its Oaknet acquisition business after three years of flat growth.
Valuation and Outlook
Eris Lifesciences achieved strong revenue growth in Q4FY23, driven by chronic therapies and Oakanet consolidation. However, operating margin declined due to increased expenses. The company plans to launch new products in Medical Dermatology and Cosmetology, and expand in CNS and Women’s Health therapies. With new product launches, Eris is expected to benefit from operating leverage and outperform the cardio-metabolic market. Wide patent expiration opportunities also indicate robust growth in the next 2-3 years.
Key Concall Highlights
- Base Business Outlook: Eris Lifesciences has a strong portfolio of top power brands, with 10 brands ranked among the top 5 in their respective segments.
- New Product Launches: The company plans to launch new products in Medical Dermatology and Cosmetology and expand in CNS and Women’s Health therapies.
- Focus on Therapy Diversification: They are focused on diversifying their therapy offerings, with emerging therapies accounting for 26% of revenue.
- Expansion of Physician Coverage: Eris is expanding its coverage of specialists and consulting physicians and aims to repay a significant portion of its debt in the coming year.
- Debt Repayment: The concentration of their top therapies has reduced, and they have started operations at a new site in Gujarat.
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