Companies

Eris Lifesciences plans ₹130 crore manufacturing facility in Gujarat

Rutam Vora Ahmedabad | Updated on July 29, 2021

Amit Bakshi, CMD   -  Businessline

Company posts 20% jump in Q1 net

Eris Lifesciences Limited plans to set up a manufacturing facility in Gujarat, a senior company official said on Thursday.

The facility, estimated to be about 10 times the size of Eris’ existing facility at Guwahati, will be developed in a phased manner, with the first phase investments of ₹120-130 crore.

“We are currently in discussions for land acquisition. But we have chosen Gujarat for the new plant,” Krishnakumar V, Executive Director & Chief Operating Officer of the company, told BusinessLine. The new plant is likely to be commissioned by end of fiscal 2023.

The Guwahati facility in Assam is spread over 1,00,000 square-feet built-up area and carries WHO-GMP certification. The tablets block at the facility has reached 60 per cent capacity utilisation and the company projects it to reach 80 per cent in next three years.

“So, this is the right time to start thinking about our long term manufacturing strategy. We made a decision to have a second manufacturing facility considering augmenting our capacity as well as taking into account the redundancy aspect in operations," he added.

As against third-party sourcing, Eris Lifesciences has adopted a strategy to maximise inhouse production to maintain its control on costs, quality and supply security. “ When we make a product in-house, our gross margins go up. This quarter we have manufactured 81% of what we have sold. And it has been one of our best quarters in terms of gross margins,” said Krishnakumar.

Q1 results

On Thursday, company posted consolidated net profit of ₹107 crore for the quarter ended June 30, up 20 per cent from ₹89 crore in the corresponding quarter last year. Total revenue from operations stood at ₹349 crore (₹293 crore).

Consolidated EBITDA grew 22 per cent to ₹126 crore for the quarter (₹104 crore).

The Board of Directors declared an interim dividend of ₹6.01 or 601 per cent per equity share of the face value of ₹1 each for 2021-22.

Amit Bakshi, CMD, said, “We believe that our focus on building strong brands in fast growing therapies coupled with several patent expiration opportunities will enable us to sustain this growth trajectory.”

The company launched three brands during the quarter. The largest contributor to the company’s growth is the diabetes and vitamins, minerals and nutritional (VMN) supplements segments. Diabetes accounts for about 32 per cent of the company’s revenues, and hence assumes importance in the company’s product portfolio.

Published on July 29, 2021

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