Eris Lifesciences and Westlife Foodworld: Weekly Recommendations

The two stocks recommended by SMC Global Securities’ Research Team this week are Eris Lifesciences and Westlife Foodworld. These two stocks have shown great potential with positive financial estimates for the next two financial years. So, let’s go through the details of the two stock recommendations for the period between May 5, 2025 and May 9, 2025.

Eris Lifesciences Limited

Eris Lifesciences share price is ₹1,493 (as on May 2, 2025) and its target price is set at ₹1,801 with an upside potential of 21%.

Eris Lifesciences Limited: Investment Rationale

• Eris Lifesciences Limited has a strong presence in Specialty and Super-Specialty therapies, accounting for over 80% of revenue. It has over 10% market share in the Insulins (RHI and Glargine) and enjoys leadership in Anti-Diabetes with 6% market share. It is well-positioned to leverage the GLP-1 market opportunity.
• It has manufacturing capabilities across a wide range of dosage forms and specialties, two WHO-GMP plants for Oral Solid Dose, two EU-EGMP and PIC/s accredited Injectable units, and one WHO-GMP Biosimilars fill-finish unit.
• The company has entered into a strategic partnership for the launch of Semaglutide to leverage the market opportunity in GLP1. The company is expected to be among the first to launch in India and given the capabilities that Swiss Parenterals has in the Form-Fill-Finish of synthetic peptides in cartridges, it is doing the necessary prework to initiate dosage-form manufacturing in due course.
• The new product launches from its own R&D pipeline have started driving growth. Liraglutide, its first GLP1 which it launched in September, has scaled up to nearly ₹1 crore per month sales. According to the company, 3 first-in-market combinations of Dapagliflozin were launched in Q3 FY25 and it plans to launch 3 more interesting FDCs soon.

• In Bhopal, the company is on track to operationalize the Form-Fill-Finish of Insulin vials from the Q1 FY2026. The validation of Insulin and glargine vials has already commenced and the margin benefits in vials because of insourcing will start accruing from Q1 FY2026.
• It plans to target EU-GMP and RoW market approvals from this unit. Its Eris Ahmedabad unit has been inspected by two RoW regulatory agencies in Q3 FY2025 and Brazilian ANVISA inspection is scheduled for the first week of May.
• On the back of these inspections and subsequent approvals, it is expecting OSD exports to kickstart from this unit in the later part of FY26. These facilities are opening up new revenue streams in terms of export markets.
• In FY2026, the company expects 50% EPS growth on the back of three factors. First is growth and margin improvement in the acquired businesses. Secondly, debt reduction in FY25 which is higher than expected by ₹500 crores, and thirdly, tighter capital management.

Eris Lifesciences Limited: Shareholding Pattern

Promoters’ shareholding is highest in Eris Lifesciences at 54.85%.

Eris Lifesciences Limited: Valuation

Eris Lifesciences’ strong market position, diversified portfolio, and strategic expansions indicate future growth visibility. Its recent acquisition of a 30% stake in Levim Lifetech positions is aimed at expansion of Levim Lifetech’s biotechnology footprint across a wide range of products and technologies.

Thus, it is expected that the stock may see a price target of ₹1,801 in 8 to 10 months’ time frame on a current price-to-book value (P/BV) of 7.34x and FY26 BVPS of ₹245.37.

Eris Lifesciences Limited: Risk

• Regulatory and Market Risks
• Economic Slowdown

Westlife Foodworld Limited

Westlife Foodworld share price is ₹675 (as on May 2, 2025) and its target price is set at ₹854 with an upside potential of 27%.

Westlife Foodworld Limited: Investment Rationale

• Westlife Foodworld Limited focuses on setting up and operating Quick Service Restaurants (QSRs) in India through its subsidiary Hardcastle Restaurants Pvt. Ltd. (HRPL). The Company operates a chain of McDonald’s restaurants in West and South India having a master franchisee relationship with McDonald’s Corporation USA, through the latter’s subsidiary.
• HRPL serves over 200 million customers, annually, at its 421 (as of December 31, 2024) McDonald’s restaurants across 67 cities in the states of Telangana, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Kerala, Chhattisgarh, Andhra Pradesh, Goa along with parts of Madhya Pradesh and Union Territory of Puducherry.
• McDonald’s operates through various formats and brand extensions including standalone restaurants, drive-thrus, McCafe, 24×7, McDelivery, McBreakfast and dessert kiosks.
• During Q3 FY25, it reported ₹654 crores in revenue for the quarter, marking a 9% year-on-year increase. Same Store Sales Growth turned positive at 3%, recovering from a 6.5% decline previously, with growth driven by higher footfalls.
• Gross margin rose 40 bps to 70.1% despite inflation. However, operating EBITDA and restaurant margins declined 200 bps due to higher A&P spends. Profit after tax was ₹5.20 crores, representing 8% of sales.

• The company’s growth strategy centers on enhancing value and driving customer excitement through product innovation, including the successful launch of the McCrispy platform and the continued popularity of McCafe offerings.
• It expanded its network significantly in 2024, opening 46 new restaurants and reaching a total of 421 outlets across 67 cities by December 31, 2024.
• On the development front, it has successfully integrated its chicken product line and aims to establish leadership in the chicken segment. Additionally, it anticipates strong growth in coffee sales, supported by the expanding coffee consumption trend in India. These initiatives align with its strategy to diversify offerings and capture new market opportunities.
• Moreover, the management of the company remains committed to long-term growth under its Vision 2027 plan, aiming to achieve ₹4,000 crores to ₹4,500 crores in sales by FY28, reflecting a strong focus on scalability, innovation, and customer engagement as key pillars of its future roadmap.
• Its digital sales now generate nearly 70% of the company’s revenue, boosted by MyMcDonald’s Rewards and widespread self-order kiosks. Balancing affordability with premium options, it leads in value perception. Emphasizing consumer preferences and digital ease, the brand enhances engagement and cements its position as a tech-savvy, value-focused market leader.

Westlife Foodworld Limited: Shareholding Pattern

In the overall shareholding of Westlife Foodworld, promoters have the highest shareholding at 56.26%.

Westlife Foodworld Limited: Valuation

The company’s performance shows strong potential through consistent product innovation, expanding its restaurant network, and entering high-demand segments like chicken and coffee. Its focus on digital convenience and customer loyalty strengthens its position in the competitive QSR market.

Thus, it is expected that the stock will see a price target of ₹854 in 8 to 10 months’ time frame on an expected P/BV of 20.50x and FY26 BVPS of ₹41.68.

Westlife Foodworld Limited: Risk

• Economic Slowdown
• Regulatory Risk

Conclusion

These two stocks, one from the pharmaceutical sector and other from the Quick Service Restaurant (QSR) sector can reach their target price in the coming 8 to 10 months. However, it is always better if you do your analysis before investing and set a stop-loss target. To keep track of your invested stocks, open free demat account with SMC Global Securities and invest on the go.

Reference:
https://www.smctradeonline.com/research/wise-money/241

Author: All Content is verified by SMC Global Securities.