ERIS - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.8

📊 Financials & Operational Strength

PAT Growth: Quarterly PAT rose from ₹83.8 Cr to ₹93.8 Cr — a 12% gain, showing decent but not explosive earnings momentum.

ROCE (12.2%) & ROE (12.9%): Moderate efficiency — below top-tier pharma peers, suggests room for margin improvement.

Debt-to-Equity (0.87): Relatively high for a pharma company — points to an aggressive expansion or acquisition-led strategy.

EPS (₹25.8): Acceptable relative to past performance but doesn't fully support the high P/E.

💵 Valuation Metrics

Metric Value Interpretation

P/E Ratio 69.8 Extremely high vs. Industry PE (34.0)

P/B Ratio ~8.5 Priced at a significant premium to book value

PEG Ratio -14.2 Skewed — likely due to unrealistic growth projections or data distortion

Intrinsic Value — At current price, appears overvalued

🚨 High valuation makes it susceptible to de-rating if growth stalls or debt rises further.

💊 Business Model & Strategic Position

Sector: Branded formulations — focused on chronic therapies like cardiovascular, diabetes, CNS.

Strengths

Strong presence in high-margin chronic segment.

Focused portfolio and marketing-led business model.

Scalable asset-light operations.

Risks

Heavy reliance on marketing over R&D.

Elevated debt may strain cash flows during downturns.

Institutional Sentiment

FII holding ↓ 0.04%

DII holding ↑ 0.11% — mixed outlook

📉 Technical View & Entry Strategy

Current Price: ₹1,792

DMA 50: ₹1,678 | DMA 200: ₹1,452

RSI (61.0): Slightly overheated

MACD (32.3): Bullish momentum — but nearing exhaustion

Volume: Lower than average — weakening trend

🎯 Suggested Entry Zone: ₹1,500–₹1,600 Consider entering near 200-DMA if correction sets in — offers better risk-reward and margin of safety.

📌 Long-Term Holding Guidance

ERIS could be a strategic hold for long-term investors who believe in chronic therapy growth and brand-led prescription models. However, the current valuation and debt levels demand cautious optimism. Monitor quarterly margins, debt servicing, and regulatory tailwinds closely.

If you'd like a deeper dive on pharma sector peers or potential upside catalysts, I can whip that up for you. Just say the word!

Edit in a page