Revenue Growth Driven by Acquisitions, Profit Declines on Higher Expenses
Ahmedabad, India, February 4, 2025 – Eris Lifesciences Limited (NSE: ERIS, BSE: 540596) announced its unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2024. The company posted strong revenue growth, supported by recent acquisitions in nephrology, dermatology, and branded formulations, but saw a decline in profit due to higher operating expenses and finance costs.
Key Standalone Financial Highlights (₹ in Crore)
| Particulars | Q3 FY25 | Q2 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | FY24 (Audited) |
|---|
| Revenue from Operations | 399.73 | 436.56 | 324.41 | 1,292.98 | 1,145.41 | 1,486.71 |
| Total Income | 407.52 | 442.37 | 327.84 | 1,311.74 | 1,159.85 | 1,521.54 |
| Profit Before Tax | 6.03 | 46.02 | 34.64 | 78.87 | 287.09 | 328.84 |
| Net Profit | 1.78 | 28.10 | 31.65 | 96.92 | 260.21 | 299.72 |
| Earnings Per Share (₹) | 0.13 | 2.06 | 2.33 | 3.45 | 19.13 | 22.04 |
The company reported a
23.2% year-over-year (YoY) growth in revenue, reaching ₹399.73 crore in Q3 FY25. However,
net profit plummeted 94.4% YoY due to increased finance costs, which surged to ₹54.65 crore compared to ₹15.14 crore in Q3 FY24.
Key Consolidated Financial Highlights (₹ in Crore)
| Particulars | Q3 FY25 | Q2 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | FY24 (Audited) |
|---|
| Revenue from Operations | 727.45 | 741.17 | 486.30 | 2,188.34 | 1,458.22 | 2,009.15 |
| Total Income | 731.67 | 745.72 | 490.50 | 2,198.75 | 1,466.89 | 2,032.97 |
| Profit Before Tax | 116.16 | 129.11 | 115.87 | 360.59 | 354.60 | 431.24 |
| Net Profit | 86.93 | 96.35 | 101.46 | 272.70 | 317.43 | 397.05 |
| Earnings Per Share (₹) | 6.15 | 6.73 | 7.55 | 18.99 | 23.60 | 28.82 |
Eris Lifesciences' consolidated revenue surged
49.6% YoY in Q3 FY25, primarily driven by acquisitions. However, net profit declined
14.3% YoY, impacted by increased operating expenses and amortization costs from newly acquired businesses.
Segmental & Financial Performance Insights
- Revenue Growth Driven by Acquisitions
- The company integrated Swiss Parenterals Limited in February 2024 and completed acquisitions in nephrology, dermatology, and branded formulations from Biocon Biologicals in April 2024.
- These acquisitions contributed significantly to the topline but increased expenses due to business combination costs.
- Higher Expenses Weigh on Margins
- Finance costs surged due to acquisition-related debt, reaching ₹57.17 crore on a consolidated basis, up from ₹18.12 crore in Q3 FY24.
- Employee costs rose 27% YoY, reflecting an expanded workforce from acquisitions.
- Depreciation and amortization expenses more than doubled, from ₹45.72 crore in Q3 FY24 to ₹81.20 crore in Q3 FY25.
- Declining Profit Margins
- Net profit margin fell to 11.95% in Q3 FY25 from 20.86% in Q3 FY24, reflecting increased cost structures.
- The operating margin stood at 23.83%, down from 27.55% in Q3 FY24, due to rising costs.
Balance Sheet & Key Ratios
| Key Ratios | Q3 FY25 | Q2 FY25 | Q3 FY24 | 9M FY25 | 9M FY24 | FY24 (Audited) |
|---|
| Debt-Equity Ratio | 0.79 | 0.86 | 0.44 | 0.79 | 0.44 | 0.86 |
| Interest Coverage Ratio | 3.03 | 3.17 | 7.40 | 3.04 | 7.85 | 6.09 |
| Current Ratio | 1.03 | 1.07 | 1.85 | 1.03 | 1.85 | 0.91 |
| Net Worth (₹ Cr.) | 3,267.09 | 3,177.15 | 2,529.54 | 3,267.09 | 2,529.54 | 3,222.03 |
- Debt levels have increased, with a debt-equity ratio of 0.79 (vs. 0.44 in Q3 FY24) due to financing for acquisitions.
- Interest coverage ratio dropped to 3.03, indicating a higher debt servicing burden.
Corporate Announcements & Strategic Developments
- Share Capital Expansion:
- Issued 23,490 equity shares under Employee Stock Option Plans (ESOPs), raising total share capital to ₹13.61 crore.
- M&A Activity:
- Completed the acquisition of 100% of Eris Bionxt Private Limited (formerly Chemman Labs) for ₹27 crore in October 2024.
- Ongoing acquisition of a 30% stake in Levim Lifetech Private Limited for ₹51.43 crore, expected to close in Q4 FY25.
- Regulatory & Taxation Changes:
- Tax expenses increased as the company exhausted Section 80IE benefits under the Income Tax Act in the previous fiscal year.
Management Commentary
Amit Ba,
Chairman and Managing Director of Eris Lifesciences, stated:
"We have demonstrated strong revenue growth, driven by strategic acquisitions and organic business expansion. However, rising expenses and finance costs have temporarily impacted profitability. We remain committed to integrating our recent acquisitions efficiently and maximizing operational synergies to enhance shareholder value."
Outlook
- Revenue Growth: Continued expansion in nephrology, dermatology, and branded formulations is expected to drive further growth.
- Cost Optimization: Focus on improving operational efficiencies and reducing finance costs.
- Strategic Investments: Integration of Swiss Parenterals and Levim Lifetech acquisition in Q4 FY25.
Conclusion
Eris Lifesciences delivered robust topline growth, fueled by acquisitions, but faced profit compression due to rising costs. The company remains focused on integrating its recent purchases while navigating cost pressures to improve profitability.