Eris Lifesciences Limited - IPO Note - Angel Broking

Views of Mr. Shrikant Akolkar (Sr. Research Analyst, Angel Broking):

"Focus on niche therapeutic segments: Since its inception, the company has been focusing on chronic and specialty acute therapeutic segments. This strategy has played well for the company, as it has gained market share in most of the therapeutic segments of its focus. This has also helped the company to become 32nd largest company by revenue in domestic pharma industry within a decade.

Outlook and Valuation: On FY2017 EPS of INR 17.6, the issue is priced at P/E of 34.25x, which is at par with its MNC peers but higher than domestic peer, Alkem Labs. Considering that Eris' faster growth, superior returns, debt free status, and specialty play, we believe that this is a fair valuation. We believe that Eris is likely to continue growing faster than its competitors owing to its marketing capability, higher operating leverage and growing market share of its mother brands. While most pharma companies are currently facing issues on several fronts, this business model looks attractive with no USFDA concerns and pricing pressure. Considering the company's superior growth, better margin profile and high return ratios, we rate this IPO as SUBSCRIBE."

Source : Equity Bulls

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