Eris Lifesciences – 100% of sales from India Pharma Market

Eris Lifesciences –

Q4 and FY 24 results and concall highlights –

Acquisitions made by the company in last 24 months –

Oaknet Pharma – entry into Derma business – paid Rs 650 cr

Select brands of Glenmark Pharma – paid Rs 340 cr

Derma brands of Dr Reddy’s – paid Rs 275 cr

Biocon’s domestic Nephro and Onco business – paid Rs 366 cr

Swiss Parenterals – sterile Injectables business – paid Rs 640 cr for 51 pc stake

Biocon’s India Injectables business – paid Rs 1242 cr

**Total cost of all acquisitions put together – 3510 cr **

Total revenues of the acquired assets at the time of acquisition – 1240 cr

Q4 outcomes –

Revenues – 547 vs 396 cr, up 38 pc ( domestic revenues @ 480 vs 389 cr )
Gross Profit – 432 vs 402 cr, up 31 pc
EBITDA – 148 vs 118 cr, up 25 pc
PAT – 79 vs 61 cr

FY 24 outcomes –

Revenues – 2009 vs 1685 cr, up 19 pc ( Domestic revenues @ 1902 vs 1606 cr )
Gross Profit – 1629 vs 1332 cr, up 22 pc
EBITDA – 674 vs 536 cr, up 25 pc ( margins @ 34 vs 33 pc )
PAT – 397 vs 374 cr, up 6 pc ( due much higher depreciation, amortisation, finance costs )

There were non-recurring one time expenses of aprox 38 cr in Q4. Adjusted to that, PAT for FY 24 would have been 430 cr

Consolidated Debt on balance sheet @ 3000 cr. Company intends to reduce it to 2600 cr by end of FY 25 out of internal accruals. By the end of FY 26, aim to bring it down to 2000 cr !!!

Aiming for organic revenue growth of 12-14 pc in the domestic formulations business. Aim to maintain EBITDA margins > 35 pc for FY25. Will share complete company level guidance post completion of integration of Swiss Parenterals and Biocon’s domestic business by end of Q1 FY25. Biocon’s domestic business is currently clocking annual sales of 360 cr. Swiss parenterals clocked FY24 revenues of 280 cr with 37 pc EBITDA margins

Eris – Biocon combined will create 5th largest Anti Diabetic franchise in India with Anti Diabetes only revenue base of close to 1000 cr / yr. It will have significant presence across oral and injectable Anti-Diabetic products

Company can work on expanding margins by using Swiss Parenterals manufacturing facilities to manufacture a lot of Biocon’s injectable products

Eris – MJ Biopharm JV ( 70:30 JV formed in 2022 to sell Insulins and GLP-1 products ) is now clocking a monthly sales of 5 cr. It reported an EBITDA loss of 20 cr in FY 23. In Q4 FY 24, EBITDA loss has narrowed down to 1 cr. Should turn EBITDA positive from Q1 FY 25

The Insulin penetration in the domestic mkt is very low. Company sees fairly large growth runway for their Insulin products – both from Biocon’s and MJ Biopharm’s portfolios

Aim to launch 4-5 new brands in India in Q1 in the Critical care space to be manufactured out of Swiss Parenteral’s facilities

Aprox capex lined up for next 2 yrs @ 70 – 80 cr each

Disc: holding, biased, not SEBI registered