Buy Eris Lifesciences; target of Rs 1500: Prabhudas Lilladher

Moneycontrol • 5 days ago

Original source

Key Investment Pillars

  • Bhopal facility ramp-up: Expected to improve gross margins and lower tax costs, with a gross margin benefit of ~100bps over the next two quarters.
  • Insulin franchise growth: Multiple growth levers, including insulin analogues, Semaglutide, and new product launches, with a structurally higher-growth biologics portfolio.
  • Semaglutide sales: Healthy ramp-up post launch, with a generic semaglutide market expected to reach INR 800mn–900mn/month next year.
  • Domestic branded formulation growth: Expected to remain 300bps ahead of IPM, with new launches gaining traction.

Thesis Validation Checklist

To validate the investment thesis, watch for:

  • Improvement in gross margins from Q3FY27 due to Bhopal ramp-up.
  • Growth in the insulin franchise, driven by analogues and Semaglutide.
  • Recovery in Swiss parenteral business from Q1FY28E, subject to GMP progress and commissioning of the new block.
  • Sustained growth in domestic branded formulations, ahead of IPM. If these signals are observed, it would support the 'BUY' rating and revised target price of INR 1,500.