During FY24-25, Eris progressed to secure building blocks in the diabetes/ obesity treatment through achieving regulatory milestones, building inhouse capacity for manufacturing, and enhancing its marketing reach. Further, it is building capacity and is in the process of getting relevant regulatory approvals for international business in the injectable segment.
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Motilal Oswal Report
We cut our earnings estimates by 5%/3% for FY26/FY27, factoring in-
recombinant human insulin-related supply issues,
gradual pick-up in utilization of the Bhopal facility, and
gradual move to alternate prescriptions because of certain fixed-dose combninations being banned by regulatory authorities.
We value Eris at 25 times 12 months forward earnings to arrive at our target price of Rs 1,350.
During FY24-25, Eris progressed to secure building blocks in the Diabetes/ Obesity treatment through achieving regulatory milestones, building in-house capacity for manufacturing, and enhancing its marketing reach. Further, it is building capacity and is in the process of getting relevant regulatory approvals for international business in the injectable segment.
Considering these factors and the reduction in financial leverage, we estimate a 15%/17%/44% CAGR in sales/Ebitda/PAT over FY25-27. The current valuations (at 38xFY26E/27xFY27E earnings) adequately capture the earnings upside. Reiterate Neutral.
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