Eris Lifesciences (ERIS) Q4 20/21 earnings summary

Executive summary

• FY21 consolidated revenue rose 12.8% to ₹12,119 mn, EBITDA grew 16.9% to ₹4,306 mn, and PAT increased 19.8% to ₹3,551 mn.

• Chronic and sub-chronic therapies represented 91% of sales; field-force productivity improved 15% and the balance sheet remained debt-free by management’s description.

• Growth was supported by chronic brands, new launches, digital engagement and stronger working-capital management amid pandemic disruption.

Financial highlights

• Consolidated operating revenue ₹12,119 mn, up 12.8% YoY; gross profit ₹9,736 mn, up 7.9%.

• EBITDA ₹4,306 mn, up 16.9%; EBIT ₹3,876 mn, up 21.8%; PAT ₹3,551 mn, up 19.8%.

• EPS ₹26.16, up 21.0% YoY; standalone revenue grew 8.7%, EBITDA 17.4% and PAT 20.4%.

• Consolidated gross margin declined to 80.3% from 84.0%, reflecting a higher new-product mix and initially higher cost of goods sold.

Outlook and guidance

• Management expects new-product gross margins to improve from the next quarter as products scale and procurement and manufacturing volume benefits emerge.

• Gluxit is expected to sustain its launch momentum in FY22; ZAC-D is expected to contribute a full year of revenue from FY22.

• The next 3–4 years’ growth plan centers on patent-expiry launches, expanded doctor reach, patient-care initiatives, productivity, in-licensing and acquisitions.

• Management expects domestic pharma growth to benefit from economic recovery and increased healthcare focus, and expects continued outperformance in core therapies.