Eris Lifesciences Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹1,141.90−₹6.90 (−0.60%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

The 60-second version of Eris Lifesciences Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Eris Lifesciences Limited, together with its subsidiaries, provides domestic branded formulations for chronic and sub-chronic therapies in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees2,758

Annual revenue₹3,115 Cr

How does it make money?

Turns over ₹3,115 Cr a year. Of every ₹100 of sales, about ₹20 reaches shareholders as profit, with ₹36 left at the operating level before interest, tax and depreciation. Each of its 2,758 employees supports ₹1.13 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin36.2%

Net margin19.9%

Revenue / employee₹1.13 Cr

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

SUN PHARMACEUTICAL IND LP/E 34.9x · ROE 14.5%

DR. REDDY S LABORATORIESP/E 31.0x · ROE 8.8%

CIPLA LTDP/E 31.8x · ROE 9.8%

DIVI S LABORATORIES LTDP/E 83.0x · ROE 17.5%

What is its competitive advantage?Some evidence

ROCE of 15.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE15.7%

ROE15.9%

Peer median ROE14.5%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 14.4% and earnings to grow about 33.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.4%

Est. earnings growth+33.1%

Analysts8

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +87% while net margin moved -14% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+87%

Margin effect-14%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

• Debt/Equity of 0.61x is manageable
✗ Current ratio of 0.74 — short-term liabilities exceed short-term assets
✓ Free cash flow is positive — the business funds its own capex
• Interest cover of 4.3x is adequate
✗ Debt has grown 39.1% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

70/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

70/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

24.3x

3Y Median

47.7x

40 monthly readings · mean 44.4x · range 25.2x–69.7x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 49% below its 3y median of 47.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 27% below the peer median of 33.3x.

vs. its own history

Cheap

47.7x median over 40 months · -49%

vs. sector peers

Cheap

33.3x median of 4 peers · -27%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

24.3x

P/B

4.00x

EV/EBITDA

16.1x

PEG

1.39

Dividend Yield

1.26%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 32.7% to 36.2% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 13.4% to 15.7%.
Valuation below its historical average
At 24.3x the stock trades 49% below its own median of 47.7x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 169% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 132% against revenue growth of 87% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 232% against revenue growth of 87% — stock may not be moving.
Short-term liquidity is tight
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 169% over 3 years, from ₹877 Cr to ₹2,359 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 232% against revenue up 87% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 132% against revenue up 87% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 32.7% to 36.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 49% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 27% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 132% against revenue up 87%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 17% a year✓ 23.3% CAGR
Latest reported year was 12.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 34%✓ 36.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✓ ₹241 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 13%✓ 15.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹15,843 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.3x

Fair

Fairly valued against the generic band

P/B Ratio

4.00x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹46.96

Profitable

Profitable on a per-share basis

ROE

15.9%

Strong

Strong capital efficiency

ROCE

15.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.61x

Moderate

Moderate leverage

Revenue Growth (YoY)

12.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

18.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.26%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹241 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,141.9

P/E (Forward)

19.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

25.8%

Good

Healthy core-business profitability

Net Margin

20.0%

Good

Strong bottom-line conversion

Current Ratio

0.74

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.03

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1206.2 / 1283.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

15.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,662 Cr	₹1,991 Cr	₹2,879 Cr	₹3,115 Cr	+23.3%
EBITDA	₹543 Cr	₹692 Cr	₹1,033 Cr	₹1,127 Cr	+27.6%
EBITDA Margin	32.7%	34.7%	35.9%	36.2%	—
PAT (Net Profit)	₹382 Cr	₹392 Cr	₹352 Cr	₹620 Cr	+17.5%
EPS	₹28.07	₹28.79	₹25.81	₹45.26	+17.3%
ROE	17.4%	15.2%	12.3%	15.9%	—
ROCE	13.4%	11.4%	12.7%	15.7%	—
Total Debt	₹877 Cr	₹2,781 Cr	₹2,478 Cr	₹2,359 Cr	+39.1%
Free Cash Flow	-₹550 Cr	₹357 Cr	₹910 Cr	₹241 Cr	—

🟢 Revenue has grown at 23.3% a year over 3 years.

🟢 EBITDA has grown at 27.6% a year over 3 years.

🟢 EBITDA Margin has risen from 32.7% to 36.2% over 3 years (+3.5 pts).

🟢 PAT (Net Profit) has grown at 17.5% a year over 3 years.

🟢 EPS has grown at 17.3% a year over 3 years.

🔴 ROE has fallen from 17.4% to 15.9% over 3 years (-1.5 pts).

🟢 ROCE has risen from 13.4% to 15.7% over 3 years (+2.4 pts).

🔴 Total Debt has grown at 39.1% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹550 Cr to ₹241 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,366 Cr

Total Liabilities

₹3,470 Cr

Total Debt

₹2,359 Cr

Cash & Equivalents

₹55 Cr

Operating Cash Flow

₹538 Cr

Capex

-₹297 Cr

Shareholding (proxy)

Institutional Holding

22.3%

Insider Holding

69.8%

Corporate Actions

Dividend Rate

₹14.42

Ex-Dividend Date

29 May 2026

Analyst Consensus

Recommendations

9 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹1,632.2

+42.9% vs CMP

Target Range

₹1,240 – ₹1,780

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

1 positive5 general

Eris Lifesciences 52 Week Low Streak Extends to 12 Sessions

Univest, 15 Oct

Eris Lifesciences drops 3% after acquiring India formulation business of Biocon arm

Upstox, 15 Oct

Here's Why Eris Lifesciences (NSE:ERIS) Has Caught The Eye Of Investors

Simply Wall Street, 21 May

Eris Lifesciences Q4 profit jumps three-fold to ₹281.6 cr; shares surge 11%

Business Standard, 20 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Markets Rally, But ERIS Lifesciences Ltd Sinks to 52-Week Low in Stock-Specific Sell-Off

MarketsMojo, 14 Oct

Buy Eris Lifesciences; target of Rs 1700: Prabhudas Lilladher

Moneycontrol.com, 30 Jul

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟢Business QualityStrong15.8/20

🟡Financial HealthAdequate10.9/20

🟡GrowthModest12.9/20

🟢ProfitabilityStrong12.8/15

🟢ValuationAttractive10.7/15

🟡RiskModerate6/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 17% a year23.3% CAGR
✓EBITDA margin holds above 34%36.2%
✗Debt / EBITDA stays below 2x2.1x
✓Free cash flow remains positive₹241 Cr
✓ROCE stays above 13%15.7%