Midcap Pharma Stock Hits New 52-Week Low, Shares Can Surge 38%, Buy, Says Prabhudas Lilladher

Prabhudas Lilladher has a "Buy" on Eris Lifesciences Ltd. (ERIS) with a target price of Rs 780 apiece. The brokerage claims a 38% return if you buy the stock at the current market price. ERIS is a pharmaceuticals sector midcap stock engaged in the business of manufacturing and marketing of pharmaceutical products. Its market valuation is Rs 7,735.83 crore. Check below to know more:

Eris Lifesciences's Stock Performance and Outlook

The stock of ERIS last traded at Rs 568.85 apiece, down 2.89% from its previous close. The stock today, 17 March 2023, hits the 52 week low at Rs 551.30 apiece. It hit the 52-week high on 4 October 2022 at Rs 749.80 apiece.

The stock has continuously declined over the past 1 year. It gave 20.4% negative return in 1 year. In 1 week it declined 6.98%. In 1 month it declined 1.92% and in 3 months it declined 14.86%, respectively. In 3 years, it gave 41.42% positive return. In 5 years, it declined 30.19%.

Enhancing broad-based offerings in derma

According to Prabhudas Lilladher, Eris Lifesciences (ERIS) acquisition of nine derma brands from Dr Reddy along with recent acquisition of brands from Glenmark will provide them comprehensive offerings in dermatology. In the near term, this acquisition will increase ERIS net debt and we see this acquisition as EPS dilutive.

Buy For a target price of Rs 780/share

"We downgrade our FY24E and FY25E EPS estimates by 9% and 3% each, given higher depreciation and interest cost. The company has multiple growth levers such as broad based offerings in derma segment, opportunities in cardio metabolic market with patent expirations and benefits of operating leverage, as revenue scales up from these acquisitions which is currently operating at sub optimal profitability. We maintain our 'BUY' rating with revised TP of Rs780 (Rs850 earlier), valuing 14x EV/EBITDA on FY25E," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.