Eris Lifesciences (ERIS) Q4 19/20 earnings summary

Executive summary

• FY20 consolidated revenue grew 9.4% YoY to INR 10,740.6 mn; EBITDA rose 6.8% to INR 3,683.7 mn and PAT increased 1.8% to INR 2,965.1 mn.

• Chronic and sub-chronic therapies made up 86% of the portfolio; Diabetes Care and Cardiac Care together contributed 56%.

• Top 10 Mother Brands represented 66% of the portfolio; top 15 represented 78% of FY20 revenue.

Financial highlights

• Consolidated revenue from operations was INR 10,740.6 mn vs INR 9,821.6 mn in FY19; growth accelerated in H2.

• EBITDA was INR 3,683.7 mn, up 6.8% YoY; EBITDA margin eased to 34.3% from 35.1% as people and promotion investments increased.

• Consolidated PAT reached INR 2,965.1 mn, up 1.8%; basic EPS was INR 21.61 vs INR 21.15 in FY19.

• Operating cash flow increased to INR 2,711.1 mn from INR 2,230.0 mn; gross profit margin was 84.0% of revenue.

Outlook and guidance

• FY21 growth priorities include strengthening current therapies, targeting products nearing patent expiry, pursuing in-licensing and acquisitions, and expanding in neurology, dermatology, women’s health and osteoarthritis.

• Zomelis was expected to benefit from a full year of sales in FY21; new launches Rariset, Redrim and Fertinine were also expected to contribute more with a full year of sales.

• The Guwahati facility can scale from single to triple shifts; management cited unutilised capacity as an opportunity for growth.