ERIS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.3

🧠 How I’m Thinking About This

You're asking for a full-spectrum analysis of Eris Lifesciences—financial health, valuation, business strength, and investment timing. The numbers show a mix of promise and caution, so let's unpack it.

📊 Core Financials Overview

Profitability

ROCE: 6.86% | ROE: 3.02% — both are weak, especially for a pharma company

EPS: ₹11.8 — modest, not justifying the high valuation

PAT Qtr: ₹100 Cr vs ₹30.5 Cr — massive jump, but likely due to one-off gains

Debt & Cash Flow

Debt-to-Equity: 0.89 — relatively high for a pharma firm; not ideal

Dividend Yield: 0.45% — low, but consistent

Efficiency

Book Value: ₹185 — P/B ~8.85, which is steep

Operating margins are under pressure despite revenue growth

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 139 Extremely overvalued vs industry PE of 33.4

PEG Ratio -3.21 Negative PEG suggests unreliable growth estimates

Intrinsic Value ~₹1,300–₹1,400 CMP is above fair value zone

The valuation is hard to justify given weak return metrics and high debt.

🏭 Business Model & Competitive Edge

Sector: Branded formulations — stable but competitive

Strengths

Focused on chronic therapies like diabetes, cardiology, and neurology

Recent ANVISA approval for sterile injectables opens export potential

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Inorganic growth via acquisitions, but margin dilution risk remains

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Challenges

Weak ROE/ROCE despite scale

High debt and valuation pressure

FII holding slightly down, DII marginally up — mixed sentiment

📉 Technicals & Entry Zone

Current Price: ₹1,638

DMA 50: ₹1,715 | DMA 200: ₹1,535 — trading below 50 DMA, bearish

RSI: 28.9 — oversold zone

MACD: -25.8 — bearish momentum

📌 Suggested Entry Zone: ₹1,400–₹1,500

If it dips further, that range offers better risk-reward.

🧭 Long-Term Holding Guidance

Caution if holding: Fundamentals are not aligned with valuation. Monitor debt and margin trends.

Wait if not invested: Better to enter post-correction or after signs of margin improvement and debt reduction.

Let me know if you want a peer comparison with companies like Ajanta Pharma or IPCA Labs.

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stockanalysis.com

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trendlyne.com

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