Eris Lifesciences IPO Rating: Buy with 2 year perspective – JainMatrix

Eris Lifesciences IPO Rating: Buy with 2 year perspective – JainMatrix

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JainMatrix Investments has recommended investors to subscribe to Eris Lifesciences IPO which opened for subscription on Friday. The Bangalore-based research house said Eris Lifesciences IPO rating is BUY, and investors can invest with a 2 year perspective. In its report, which is available further down the page, the company has outlined its reasons as follows:

  • Eris is a fast growing pharma company with a portfolio of complementary products. In the chronic category, they were the fastest growing, among the top 25 in terms of revenues.
  • Eris has a portfolio of high volume and leading brands. Its focus is on metro cities and class 1 towns which have higher incidence of lifestyle disorders.
  • Eris has strong sales, marketing and distribution capabilities and good engagement with doctors.
  • The product range does not contain OTC products, so Eris has avoided the investment heavy consumer space. Instead it focuses on the B2D or Business to Doctor marketing. This we feel entails lower costs and helps maintain margins.
  • The financial health of the company is good, and the company has grown rapidly under the leadership of Amit Bakshi. He was a pharma salesman who worked in companies like Torrent, Eli Lilly and Intas and had many years of experience in the pharma industry before starting Eris.
  • Eris is immune to the global approvals/ USFDA risks as they have a domestic focused business.
  • Leadership appears to be dynamic and aggressive, and using strategies that play to their strengths.
  • The unofficial/ grey market premium for this IPO is Rs. 86/share. This is a positive.

Eris Lifesciences IPO Rating: Buy with 2 year perspective

  • As India accelerates its per capita income from a low base, a lot of the individual income gains are directed to the pharma sector for better healthcare.
  • Within the growing industry, Eris has a market share of 0.7% achieved in just 10 years of existence. There is certainly ample scope for Eris to grow both market share and absolute revenues.
  • Eris is already growing fast and stands out for the domestic focus, strong marketing & sales, good connect with doctors & medical ecosystems, and efficient mfg. & procurement giving high margins.
  • While the IPO is an exit opportunity for some investors, it empowers Eris for the next phase of growth by providing visibility and prestige, and the ability to raise fresh funds at low cost.
  • At a P/E of 34.25 TTM the valuations in the IPO are high but not aggressive, and justified by Eris’ growth rates.
  • Opinion: This IPO offering is rated BUY, and investors can invest with a 2 year perspective.

Read the full report on Eris Lifesciences IPO rating here

Download the PDF file .

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