ERIS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | ERIS | Market Cap | 18,328 Cr. | Current Price | 1,323 ₹ | High / Low | 1,910 ₹ |
| Stock P/E | 61.7 | Book Value | 203 ₹ | Dividend Yield | 0.56 % | ROCE | 6.86 % |
| ROE | 3.02 % | Face Value | 1.00 ₹ | DMA 50 | 1,372 ₹ | DMA 200 | 1,460 ₹ |
| Chg in FII Hold | -0.46 % | Chg in DII Hold | 0.04 % | PAT Qtr | 17.0 Cr. | PAT Prev Qtr | 150 Cr. |
| RSI | 43.4 | MACD | -2.66 | Volume | 1,23,346 | Avg Vol 1Wk | 1,51,475 |
| Low price | 1,200 ₹ | High price | 1,910 ₹ | PEG Ratio | -1.42 | Debt to equity | 0.79 |
| 52w Index | 17.3 % | Qtr Profit Var | 853 % | EPS | 20.8 ₹ | Industry PE | 30.1 |
Financials & Valuation:
ERIS shows weak fundamentals. ROCE (6.86%) and ROE (3.02%) are very low, reflecting poor capital efficiency. EPS of 20.8 ₹ is modest, but quarterly PAT collapsed to 17 Cr. from 150 Cr., highlighting severe earnings volatility. Debt-to-equity at 0.79 is relatively high, adding financial risk.
Valuation Indicators:
P/E ratio of 61.7 is significantly higher than the industry average (30.1), indicating overvaluation. Book Value of 203 ₹ compared to current price of 1,323 ₹ shows premium pricing. PEG ratio of -1.42 signals valuation concerns relative to growth. Dividend yield of 0.56% provides limited income support.
Business Model & Health:
ERIS, a pharmaceutical company, benefits from demand in branded generics, but profitability metrics are weak. Declining FII holdings (-0.46%) show reduced foreign confidence, while DII holdings were marginally positive (+0.04%).
Entry Zone & Holding Guidance:
Technically, support lies around 1,200–1,250 ₹, with resistance near 1,360–1,380 ₹. Entry should only be considered near support levels with strict stop-losses. Long-term holding is not advisable until profitability stabilizes and valuation aligns with industry benchmarks.
Positive
- EPS of 20.8 ₹ supports profitability.
- Dividend yield of 0.56% provides some income support.
- DII holdings slightly increased (+0.04%).
Limitation
- Very high P/E (61.7) vs industry average (30.1).
- Weak ROCE (6.86%) and ROE (3.02%).
- PEG ratio (-1.42) reflects valuation concerns.
- High debt-to-equity (0.79).
- PAT collapsed from 150 Cr. to 17 Cr.
Company Negative News
- Sharp decline in quarterly PAT.
- Weak investor sentiment with FII reduction.
- Poor return metrics and high leverage.
Company Positive News
- EPS remains positive despite weak profitability.
- Slight increase in DII holdings.
Industry
- Pharma sector benefits from consistent demand and export opportunities.
- Industry PE (30.1) is much lower than ERIS’s, highlighting overvaluation.
- Long-term growth supported by healthcare demand, but ERIS lags peers in efficiency.
Conclusion
ERIS is fundamentally weak with poor profitability, high debt, and extreme overvaluation. Entry should only be considered near 1,200–1,250 ₹ with strict stop-losses. Long-term investors should avoid until earnings stabilize and valuation normalizes.
Would you like me to extend this into a peer benchmarking overlay comparing ERIS against Cipla, Sun Pharma, and Dr. Reddy’s to highlight relative positioning in profitability and valuation?