Buy Eris Lifesciences, target price Rs 690: Haitong Securities

Haitong Securities has retained buy rating on Eris Lifesciences and raised target price to Rs 690 from Rs 570. The stock ended down 2.3 per cent at Rs 481.50 on Monday while BSE Sensex closed 59.28 points up (+0.19%) at 31,648.

Eris Lifesciences Ltd., incorporated in 2007, has a market cap of Rs 6537.84 crore.

Investment Rationale


With superior profitability, strong free cash flow generation and 35 per cent return on invested capital, Eris' financials are comparable to its MNC peers, said Haitong. The brokerage values Eris at a 20 per cent premium to its mid-cap peers. The stock is trading at par with mid-cap peers which have a significant exposure to low multiple generic markets, said Haitong.

Financials

Eris Lifesciences' key products/revenue segments include Pharmaceuticals which contributed Rs 881.13 crore to sales value (99.89 per cent of total sales) and Others which contributed Rs .89 crore to sales value (0.10 per cent of total sales)for the year ending March 31, 2019.
For the quarter ended December 31, 2019, the company reported a Consolidated sales of Rs 261.75 crore, down -6.67 per cent from last quarter sales of Rs 280.46 crore and up 5.34 per cent from last year same quarter sales of Rs 248.48 crore. The company reported net profit after tax of Rs 63.47 crore in the latest quarter.