Pharmaceuticals · ZYDUSLIF
Pharma - Formulators
from 1,191 today
Revenue grew 22% YoY to INR 80bn led by broad-based growth across geographies. EBITDA margin declined 760bps YoY to 23.4% and FY27 guidance was maintained.
Zydus Lifesciences reported revenue of Rs.78,020 Mn grew 20.6% YoY, materially exceeding estimates, though EBITDA was inline and net earnings were lower due to higher amortization costs. We tweak our estimates and maintain our HOLD rating with a Target Price of Rs.1,203.
We maintain our FY27E/FY28E EPS estimates, as higher growth led by India formulations is offset by increased Saroglitazar-related costs, depreciation and lower other income. Over FY26-29E, we expect revenue/EBITDA/PAT CAGR of 14%/12%/5%, with EBITDA margins contracting 150bps to 25%. We value the stock at 23x 1HFY29E EPS, arriving at a revised TP of INR 1,380. Maintain BUY.
Zydus Lifesciences delivered largely in-line revenue/EBITDA in 1QFY27, though earnings missed estimates due to higher depreciation, interest, and taxes. While domestic formulation and emerging markets showed robust growth, North American sales declined and valuation provides limited upside, leading to a Neutral stance.
Zydus Lifesciences Q1 EBITDA was largely in line with estimates, aided by higher revenues across key markets, and the company is working on a robust pipeline of complex products. We maintain our Accumulate rating with a target price of INR 1,200, valuing at 25x FY28E EPS.
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