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Citigroup maintains buy on Eris Lifesciences, raises target price to Rs 750

The brokerage has raised FY21 and FY22 estimated EPS by 2.5% and 3% respectively.

Updated: Dec 06, 2019, 08.28 AM IST
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Citigroup has maintained buy rating on Eris Lifesciences in the long term and raised target price to Rs 750 from Rs 730.The stock ended down 0.6% at Rs 442.40 on Thursday while BSE Sensex closed 70.70 points down at 40,779.59.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 280.46 crore, up 3.15 % from last quarter Sales of Rs 271.89 crore and up 7.64 % from last year same quarter Sales of Rs 260.56 crore. The company has reported net profit after tax of Rs 92.71 crore in the latest quarter.

The company’s top management includes Dr.Kirit Nanubhai Shelat, Mr.Amit Indubhushan Bakshi, Mr.Inderjeet Singh Negi, Mr.Prashant Gupta, Ms.Vijaya Sampath. The company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2019, the company has a total of 137,519,783 shares outstanding.

Investment Rationale

The company has acquired a vildagliptin trademark, Zomelis, from Novartis for $13 million. The brokerage has raised FY21 and FY22 estimated EPS by 2.5% and 3% respectively. Eris is expected to price Zomelis at a slight premium to Tendia, given that it is an established brand and a better product, said Citigroup. Eris expects higher volumes to make up for lower pricing in the first year itself, said Citigroup.

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