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Check Before You Invest : Eris Lifesciences Ltd

BSE: 540596 NSE: ERIS ISIN: INE406M01024
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Eris Lifesciences Ltd belong to?
Eris Lifesciences Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Eris Lifesciences Ltd a good quality company?
Eris Lifesciences Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Eris Lifesciences Ltd undervalued or overvalued?
Eris Lifesciences Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 31.29 30.73
Price to Book 4.97 5.28
Price to Sales 6.22 6.83
EV to EBITDA 19.18 20.48
Q.4 Is Eris Lifesciences Ltd a good buy now?
Eris Lifesciences Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Eris Lifesciences Ltd?
Eris Lifesciences Ltd revenue growth is 44% for FY-2025, which is above its 5-year CAGR of 21.92%, indicating faster growth.

Q.2 Gross Profit margin of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Gross profit margin which is the profit after deduction of direct costs, is 27.1% for FY-2025, which is below its 5-year median of 29.6%, indicating decreasing margins.

Q.3 Operating Profit Margin of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 35.18% for FY-2025, which is in line with its 5-year median of 35.18% indicating stable margins.

Q.4 Net Profit Margin of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Net Profit Margin is 12.95% for FY-2025, is below its 5-year median of 22.2%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 27.1 29.6
Operating Profit Margin (%) 35.18 35.18
Net Profit Margin (%) 12.95 22.2

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Return on Asset is 5.48%, which is below its 5-year historical median of 13.4%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Return on capital employed is 13.59% for FY-2025, which is below its 5-year historical median of 17.3%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Return on equity is 13.81% for FY-2025, which is below its 5-year historical median of 18.25%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Cash conversion cycle is 34 days, above its 5-year historical median of 29 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.43 0.63
ROE (%) 13.81 18.25
ROCE (%) 13.59 17.3
Cash Conversion Cycle 34 days 29 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Debt-to-Equity ratio is 0.85, which is above the industry average of 0.14, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Eris Lifesciences Ltd?
Eris Lifesciences Ltd Debt to cash flow from operations is 2.27, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Eris Lifesciences Ltd?

Q.1 Promoter shareholding and pledge status of Eris Lifesciences Ltd?
Promoters hold 54.14% of the Eris Lifesciences Ltd, with 16.85% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Eris Lifesciences Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Eris Lifesciences Ltd vs industry peers?
Eris Lifesciences Ltd revenue CAGR is 21.92%, compared to the industry median CAGR of 5.34%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 44 5.3
Gross Profit Growth (%) 30.9 11.8
Operating Profit Growth (%) 50.7 10.8
Net Profit Growth (%) -5.5 12.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.43 0.78
ROE (%) 13.81 8.58
ROCE (%) 13.59 10.85
Cash Conversion Cycle (days) 34.08 76

Valuation & price assessment

Q.1 Stock return of Eris Lifesciences Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 12.87% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 12.9% 22.5% -22%
Q.2 Valuation ratios of Eris Lifesciences Ltd vs historical?
The current P/E ratio of 31.29 is in line with than its historical median of 30.73, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 31.29 30.73 31.09
Price to Book 4.97 5.28 2.85
Price to Sales 6.22 6.83 2.82
EV to EBITDA 19.18 20.48 15.99

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