Eris Lifesciences - 100% of sales from India Pharma Market

I think results were reasonable, Q4 is always a low base quarter so QoQ comparison will give an incorrect picture. On a YoY basis, company grew around 9-10% which is higher than IPM growth. If we look at IPM data, there has been volume de-growth at an industry level whereas Eris has managed to maintain its volumes. The recent insulin launch will reflect in FY23 numbers, lets see how it goes.

Today’s acquisition of Oaknet is also very interesting, it gives Eris an entry in Dermatology segment. Oaknet is supposed to do sales of 195 cr. in FY22 with gross margins of 75% and Eris paid 650 cr. for this (~3.33x sales). This is probably close to a fair price (or maybe a bit undervalued), specialty brands generally sell at 4-6x sales in private markets. I think Eris will rationalize the MR strength (or make them sell more products), you generally don’t need 650 MRs for maintaining sales of 200 cr.

Disclosure: Invested (position size here, bought few shares in last-30 days)


The recent acquisition of Oaknet by Eris is an interesting foray into dermatology and other branches where Oaknet has strength.

Oaknet has a good basket of products, though none of the products are highly differentiated. The whole game here could be using Eris marketing skills in a company which is already present in certain segments and try to accelerate the growth in the acquired company.

Oaknet has been a not too agressive, not too sleepy kind of company, and that is reflected in the 9% cagr sales growth as depicted in previous post. If eris can somehow sweat existing products and bring in new novel products, this can be a value accretive acquisition.

disc: no positions. But got interested due to Oaknet (a company I am familiar with) acquisition. I think earlier name of Oaknet was Cosme healthcare and that too probably was acquired by Oaknet, or underwent a name change.


Today’s interview of Eris Life’s MD - Mr Amit Bakshi where-in he clearly spells out the rationale and economics behind the acquisition of Oaknet.

Looks like a very good catch for Eris. Plus the growth guidance for the organic business is also reasonably strong.

At CMP, Eris Lifesciences looks to be undervalued and ripe for buying considering its a pure play branded India generics business with excellent return ratios. Plus these smart acquisitions are a cherry on the cake.

Disc : invested, biased. Added more today.


Eris seems to be managed all functions like manufacturing , sales , branding , and even IT systems very smartly


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Notes from AR iro Eris Lifesciences for FY 21-22 -

  1. Company remains focussed on brand building. Their top 15 mother brands clock in 80 pc of the company revenues. Company grew in double digits despite IPM growth of 1.3 pc ( only - due pandemic hitting acute therapies ). The same was due to company’s focus on chronic therapies. Field force productivity improved 15 pc during the year.

  2. Company has exiting organic and inorganic growth opportunities ahead -
    (a) Rich pipeline of new product launches led by patent expiries in cardio-metabolic and allied segments.
    (b) Expanding coverage of specialists and consulting physicians.
    (c) Company’s push for early detection and better life cycle management through patient care initiatives.
    (d) Tech investments to improve sales force productivity.
    (e) Company is on the look out for high-return in-licensing and acquisition opportunities.

  3. Currently, ERIS is ranked 22 in IPM and is the only pure play India focussed company in the listed space. Revenues have grown 6X in last 10 yrs and 2X in last 5 yrs. Company has maintained ROIC > 30 pc for last 12 Yrs. Chronic focussed portfolio contributes 91 pc of sales with 7 pc of sales coming from NLEM drugs. Company is ranked no 3 among diabetologists and no 4 among cardiologists. Company’s top 10 products are ranked among top 5 in their respective categories. Two of company’s brands rank no 1 in their respective categories - Gluxit ( Dapagliflozin ) and Zomelis ( Vildagliptin ). Another dominant brand from company’s stable is Renerve ( nutraceutical ) is clocking annual sales of 135 cr.

  4. For FY 21-22, Cardio metabolic segment ( 60 pc of company revenue ) grew by 9.7 pc vs Mkt growth of 9.3 pc. Nutraceuticals ( 20 pc of business ) grew by 15 pc vs Mkt growth of 8.6 pc. Gross margins reduced from 84 pc to 80 pc due to increased investments behind new launches.

  5. Therapy wise revenue breakdown -

Oral diabetes care - 32 pc
Cardiac care - 26 pc
Vitamins, Minerals,Nutrients - 20 pc
CNS - 7 pc
GI - 6 pc
Gynae - 4 pc
Pain - 2 pc
Others - 3 pc

  1. Manufacturing infra - Manufacturing facility at Guwahati accounted for 74 pc of all products sold in FY 21. Also eligible for tax benefits till FY 24 and GST subsidies till FY 25.

Disc : invested, biased.


Company hosted an investor call with Bank of America and Abakkus PMS on 18 Jul 22.

Disc : invested, biased

Can you share the link of Eris’ FY22 annual report? I haven’t been able to find the same.


It was available on company website a few days ago. Now, even I can’t locate it. :face_with_open_eyes_and_hand_over_mouth:

Q1 results from Eris Lifesciences. Prima facie, results look mixed.

However, company has guided for 30 pc revenue and 16-17 pc EBITDA growth for FY 23. Will have to listen to concall to figure out where is such confidence emanating from.

Disc: invested, biased.


I was on the call, most growth is coming from Oaknet acquistion (contribution will be ~185 cr. to Eris in FY23). Also, a few of their products are doing very well (zomelis crossed 100 cr. runrate, CNS is growing at 20%+, Insulin portfolio should do 20 cr. annual revenues, and they have 15+ launches planned this year). Margin wise, it will be a soft year. They are guiding for margins reverting to 36% by FY25.

Disclosure: Invested (position size here, no transactions in last-30 days)


Thanks for the prompt reply. One doubt that I have… In Q1, Oaknet’s contribution was only 31 cr ( as per investor PPT ). Doing 185 cr for full FY from Oaknet looks like a tall ask.

Did the management throw any light on this?? Is the Oaknet business showing increased momentum in Jul-Aug etc??

Thanks in advance.

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Quarterly run-rate of Oaknet is actually 55 cr., only 31 cr. was accrued to Eris in Q1 as the acquisition was done in early May 2022 (so 24 cr. did not accrue to Eris). Management is guiding that 55 cr. quarterly sales look sustainable, if thats the case for the full year Eris should get 31+55*3 ~ 196 cr. So 185 cr. is doable if Oaknet maintains the runrate.



  • Guidance: 30% consolidated revenue growth, 32-33% EBITDA margin. Will be back to 36% EBITDA margin by FY25
  • Zomelis brand has crossed 8.3 cr. monthly sales (annual run-rate of 100 cr.). This should be the 4th 100 cr. brand by end of FY23
  • Oaknet: Quarterly run rate of 55 cr. sales and 10 cr. EBITDA
  • Cardio market has started reviving in June-July (average growth has increased to 13% vs 2% in the past twelve month)
  • Aprica: profitability will be maintained ~20%
  • In order to get to 14-15% organic growth trajectory, IPM growth has to come back to 8-10%
  • Expect 200 bps pressure on gross margin due to newer launches
  • Expect to deliver 20 cr.+ annual sales of insulin with EBITDA loss of 15 cr. Will launch insulin Glargine in Q3FY23 (in-licensed from Biocon). One-time payment and then sourcing arrangement (no recurring royalties)
  • Gujarat facility will commence in Q4FY23 – capex incurred was 34 cr. (100 cr. incurred till date). Total expected capex ~ 170-180 cr.
  • EBITDA margins will be impacted: (1) EBITDA losses due to insulin launch, (2) a lot of new product launches in cardiology in Q2 and Q3, (3) Oaknet margins
  • Have not had new launches in CNS, but this segment is growing at 20-25%
  • Trade generics: Had 8 cr. EBITDA loss in FY22 and will move to breakeven in FY23

Disclosure: Same as before


This sounds like a catastrophic news for Domestic branded generic players.

Requesting views form better informed Forum members.

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Very insightful interview, management covers their diabetes and CV launches along with the rationale for Oaknet acquisition. Also, they mention that current rules will mostly impact trade generic companies.


Company came up with reasonable results, Oaknet business has turned around faster than earlier guided and is already doing 24% EBITDA margins. Management is guiding for 30% sales growth and 16-17% EBITDA growth in FY23. Recovery in cardiovascular division is the reason behind the confidence. Concall notes below.


  • Guidance maintained at 30% sales growth and 16-17% EBIDTA growth for FY23. Tax rate will be ~10% for FY23
  • Oaknet’s 50 cr. target EBITDA will be achieved in FY23 vs earlier guidance of FY24. Expanded dermatologist coverage to 90% from 60%
  • Oaknet will be amortized over 20 years
  • Growth in cardiovascular division has resumed. SGL2 & DPP4 contributes 35-40% to diabetes sales
  • The stark difference in primary (10%) vs secondary sales (19%) is because of certain products (probably Zayo, link) which have gone into legal issues, which were already supplied to the market (but are no longer being supplied). So these are captured in secondary sales data but not in primary sales
  • Launched 4 drugs (Zomelis D, Glura, Gluxit S & FCM Injection) in H1 FY23
  • Aim is to get 18-20 cr. of revenues from insulin in FY23. This will not be a cash burn business in FY24
  • Eris standalone PCPM ~ 5.3 lakh, Oaket PCPM ~ 3-3.5 lakh

Disclosure: Invested (position size here, no transactions in last-30 days)


New investor presentation here…Important slide for growth drivers added


Descent set of Q3 results. Most of the growth attributable to the acquired portfolios in the last 1 yr. PAT is flat despite steep rise in Consolidated Revenues due to higher depreciation, amortisation and employee expenses that come with acquisitions.

Key positive - Acquisition of Derma portfolio of Glennmark Pharma for 340 cr. The portfolio’s last yr sales were at 87 cr. Combined with Oaknet’s ( a Derma Formulations company ) acquisition last yr, Eris is now becoming a serious branded derma player in India. Should be a long term positive.

Disc : holding a tracking position. Biased.


Company came up with mixed set of results (27% sales growth, flat PAT YOY). Organic growth lagged due to loss in sale of 2 molecules, one due to legal issue and other was a covid product. Oaknet has turned out to be a very good acquisition, and this has given them the confidence to acquire 9 derma brands from Glenmark. Concall notes below.


  • Guidance lowered to 25-26% (from 30% earlier) and 14-15% EBITDA growth (lowered from 16-17%) for FY23.
  • Zayo revenues was 30 cr. in FY22 which has gone to zero due to legal issue. One more product launched during the 2nd COVID wave (called Zandi) was discontinued (30 cr. revenue contribution in FY22) and there was sales return of 18-20 cr. in 9MFY23
  • Acquired 9 medical dermatology brand (anti-fungal & anti-psoriasis) from Glenmark. 3 brands (Onabet, Halovate and Sorvate) are ranked #1 in their respective segments. 3 other brands (Demelan, Dosetil and Aceret) are ranked in top-3 of their respective segments. These brands have declined for Glenmark in past few years, they were considered as non-core by Glenmark
  • FY22 revenue base of these 9 brands: 85 cr. (purchased at 340 cr.). Will be financed fully through borrowings (8% rates). Gross margins are 78%+
  • Net debt / EBITDA will go to 0.8-0.9x after current acquisition
  • 70% of dermatology sales come from medical dermatology and is growing at 9-10%. Eris wants to position themselves strongly there
  • Oaknet: 60 cr. at 27% EBITDA margins. 9MFY23: 183 cr. (160 cr. has accrued to Eris) at 24% margins. Will exceed 50 cr. EBITDA in FY23.
  • Oaknet had 60% growth in doctor prescription (July, August audit)
  • Insulin sales will be around 20 cr. in FY23 (was 6 cr. in Q3; expect 7-8 cr. in Q4). Will burn (-20 cr.) of EBITDA on Insulin. EBITDA burn has come down to (-4 cr.) this quarter. Expect next year to reach 50 cr. in revenues with breakeven EBITDA
  • Margins have bottomed out in FY23 and will increase in FY24
  • Zomelis reaches 92 cr. MAT in Dec 2022 (#1 rank), Gluxit reaches 51 cr. MAT in Dec 2022 (#2 rank)
  • MRs: 3000 (consolidated), 2225 (standalone)
  • Tax rate: 9-10% for FY23 and FY24. For FY25, blended booked tax rate will be 27-28%. Cash tax rate will continue to be 17% for next 5-years and booked tax rate will also come to 17-18% over 5-years post FY25
  • Trial batches have started in Gujarat. Capex is largely finished. Depreciation will be 9-10 cr. per year
  • On 75 cr. of gross block in Guwahati, Eris does turnover of 800 cr (10x fixed asset turns). So with Gujarat facility coming on stream, there will be no requirement of further manufacturing facilities for a long time to come

Disclosure: Invested (position size here, bought shares in last-30 days)