Eris Lifesciences - 100% of sales from India Pharma Market

Muted set of nos continues for Eris, with organic growth at 9.5%. However, their big brands such as Glimisave, Eritel, etc. have finally started growing after a gap of 2-3 years. Management is very confident of recouping margins in FY24 and is looking to pay down 400 cr. of debt in FY24.

FY23Q4

  • Organic revenue growth was only 9.5% due to discontinuation of Zac-D (covid product) and Zayo (legal issues). Ex of these, growth was 15.6% in FY23
  • Spent 1265 cr. in dermatology acquisitions
  • Clocked 17 cr. revenues in Insulin, should be EBITDA neutral in FY24. Q4 run rate was a bit lower due to supply issues
  • Trade generics: Hoping to not incur loss in FY24, not focusing on growth in this segment
  • Will give FY24 guidance at end of Q1 with more visibility on integration of Glenmark and Dr. Reddy brands
  • Dermatology brands are currently outsourced, looking to bring in to Gujarat facility by end of FY24 (15% tax rate)
  • FY24 ETR: 14-15%
  • Intend to pay down 400-500 cr. debt in FY24
  • Eris standalone metrics: 82% gross margins, 5L YPM and 38% EBITDA. Oaknet metrics: 78-80% gross margins, 5L YPM
  • MR expansion: will setup 1 more division in dermatology in H2FY24 (~100 people)
  • MR: 2200 (standalone) + 700 (Oaknet)
  • Oaknet FY23 revenues (pro-forma): 250 cr. (booked 226 cr. for 10.5 months) and 61 cr. EBITDA

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

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