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<ul><li>The company which is known for its oral diabetics reported a 10% growth in August sales.</li><li>The management said that its sales performance will be ahead of the market in FY24.</li><li>Analysts say that it has multiple growth levers with new launches, better capacity utilization and more. </li></ul>Indian pharma sales have been tepid this monsoon due to delayed seasonal effects. One of the better performers in August has been Ahmedabad based <keyword id="3157738" type="General" weightage="20" keywordseo="eris-lifesciences" source="Orion">Eris Lifesciences</keyword> which clocked 10% monthly sales growth. The company, which is known for its oral diabetics, was able to report a stellar growth in the sector. Says a recent report by J M Financial: “Apart from ophthalmology, oncology, urology and cardiac and anti-diabetic, all top therapies reported negative volume growth this month.” Its monthly growth, however, is not the only factor driving the stock which has gone up by 26% in the last month, giving 16% returns over a one year period. The company hopes to achieve market beating growth in the current financial year. “We have to see how the market behaves. But this year we should be at least 400 basis points ahead of the market. The market in our view would end up at around 8% at least, 8% to 9%,” said Amit Bakshi in the earnings conference call. The inorganic growth story The company has a charted a long winding inorganic growth strategy by acquiring the domestic formulations portfolio of Strides Shasun in 2017; Zomelis (Vildagliptin) brand from Novartis in 2019; and forged an equity alliance with MJ Biopharm in 2021. Each of these acquisitions has given it entry into new therapeutic segments like the central nervous system, and strengthened its presence in the diabetics segments. Its latest acquisition of Mumbai-based formulations company Oaknet in 2022, has added to its women’s health segment while helping it enter the dermatology sector. The results of the consolidation of business was evident in the latest quarter where its revenues went up by 17% YoY, which was above market expectations, driven by growth in branded formulations and Oaknet consolidation. “Eris Lifesciences recorded robust annual revenue growth in Q1FY24 led by the smooth integration of Oaknet operations and the gradual ramp-up in capacity utilization levels that aided growth during the quarter,” said a research report by B P Equities. Even as its adjusted net profit remained flat, its operating profit margin during the quarter expanded by 396 basis points to 36.4% in Q1FY24. Some of its acquisitions are operating at sub-optimal profitability and a revenue scale up from the same is expected soon. New launches ahead It has also planned new launches in dermatology and aims to expand product ranges in women’s health therapies. We have had a couple of very good launches. We just launched something for the first time in India – Minoxidil Booster. It has a very large market for alopecia. We are quite excited, and hitting the market with a very good moisturizer by the month end again. So, our plate is quite full,” said Bakshi. Going ahead, the company remains on track to improve the profitability of acquired businesses and build its product pipeline with new launches, the research firm said. BP Equities says that the company has multiple growth levers ahead such as healthy product launches in the cardio, diabetes and derma segment, reducing losses in the insulin business and better capacity utilization. The pharma company is also expanding its coverage of specialists and consulting physicians and is expected to add more medical representatives in FY24. It’s also planning to repay debt, with aims to bring it down to ₹400 crore net debt by the end of the current fiscal year. “Going ahead, we expect the company to outperform within the cardio-metabolic and derma market and expect robust growth over the next 2-3 years with wide patent expiration opportunities,” said BP Equities.

This midcap pharma stock eyes multiple growth levers with its acquisition strategy

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This midcap pharma stock eyes multiple growth levers with its acquisition strategy

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