Company Update
Retail Equity Research
Zydus Lifesciences Limited BUY
Sector: Pharmaceuticals 03rd September, 2025
Key Changes Target Rating Earnings Target Rs. 1,121
Stock Type Bloomberg Code Sensex NSE Code BSE Code Time Frame CMP Rs. 996
Large Cap ZYDUSLIF:IN 80,158 ZYDUSLIFE 532321 12 Months Return +13%
Data as of: 02-Sep-2025, 18:00 hrs
MedTech platform adds revenue streams
Company Data
Zydus Lifesciences Ltd (Zydus) is one of India’s leading, vertically integrated pharma-
Market Cap ([Link]) 1,01.015 ceutical companies. It operates across the value chain, from manufacturing finished
52 Week High — Low (Rs.) 1,136 - 797 dosages to active pharmaceutical ingredients, as well as animal healthcare and well-
Enterprise Value (Rs. cr)
ness products.
1,03,915
• Zydus’ revenue increased 5.9% YoY to Rs. 6,574cr in Q1FY26 driven by 6.5% YoY
Outstanding Shares (cr) 100.6
Free Float (%) 24.7 rise in pharmaceuticals to Rs. 5,716cr and a 2.3% YoY increase in consumer prod-
Dividend Yield (%) 1.1 ucts to Rs. 858cr.
6m average volume (cr) 13.0 • The Indian formulations business grew 8.0% YoY to Rs. 1,520cr, driven by chronic
Beta 0.6
portfolio growth (43.7% share) and leadership in oncology and key therapies like
Face value (Rs. ) 1.0
cardiology, respiratory, pain and anti-infection.
Shareholding (%) Q3FY25 Q4FY25 Q1FY26
Promoters 75.0 75.0 75.0 • EBITDA was nearly flat at Rs. 2,089cr; however, EBITDA margin contracted by
FII’s 7.5 7.3 7.1 180bps YOY to 31.8%, due to increase in employee benefits expenses (+13.8%
MFs/Institutions 10.7 11.0 11.1 YoY) and other expenses (+2.2% YoY).
Public 5.9 5.9 5.9
Others 0.9 0.8 0.8
• Zydus said the US pharmaceutical tariffs are uncertain and the impact is still being
Total 100.0 100.0 100.0 assessed, but it would continue to provide generic access, which makes up ~90%
Promoter Pledge Nil Nil Nil of the US market volumes and supports affordability.
Price Performance 3 Month 6 Month 1 Year
• Zydus reported positive topline results from EPICS-III trial of Saroglitazar Magnesi-
Absolute Return 6.8% 13.7% -10.8%
Absolute Sensex -1.2% 10.1% -2.7% um in Patients with Primary Biliary Cholangitis and is planning for regulatory filing.
Relative Return 8.0% 3.6% -8.2%
Outlook & Valuation
*over or under performance to benchmark index
The company delivered a good, broad-based performance, driven by market share
gains in key therapies, strong growth in international markets, and momentum in
high-value specialty launches. Management anticipates sustained growth in the US,
robust emerging market expansion, and scale-up in the differentiated 504(b)(2)
portfolio. Strategic priorities include the launch of Semaglutide, Desidustat
commercialisation in China, and the rollout of CE-approved robotic surgery.
Continued operational efficiency measures and capacity expansion are expected to
Y.E March (cr) FY25A FY26E FY27E strengthen competitive positioning. Considering these factors, we remain positive
Sales 23,242 25,632 26,598 and reiterate our BUY rating on the stock, with a revised target price of Rs. 1,121,
Growth (%) 18.9 10.3 3.8 based on a 27x FY27E adj. EPS.
EBITDA 7,059 6,993 6,572
EBITDA Margin (%) 30.4 27.3 24.7 Quarterly Finance Consol.
PAT Adjusted 4,745 4,570 4,257 YoY Growth QoQ Growth
[Link] Q1FY26 Q1FY25 Q4FY25
Growth (%) 22.5 -3.7 -6.8 (%) (%)
Adjusted EPS 45.0 45.4 42.3 Sales 6,574 6,208 5.9 6,528 0.7
EBITDA 2,089 2,084 0.2 2,126 -1.7
Growth (%) 22.5 -3.7 -6.8
Margin (%) 31.8 33.6 -180bps 32.6 -80bps
P/E 19.7 21.8 23.4
EBIT 1,850 1,869 -1.0 1,888 -2.0
P/B 3.7 3.6 3.2 1,921 1,900 1.1 1,672 14.9
PBT
EV/EBITDA 13.3 14.9 15.8 Rep. PAT 1,487 1,464 1.6 1,249 19.0
ROE (%) 19.3 16.6 13.6 Adj PAT 1,467 1,420 3.3 1,391 5.5
D/E 0.1 0.1 0.1 Adj. EPS (Rs) 14.6 14.1 3.3 13.8 5.5
[Link]
Key concall highlights
• Zydus received marketing authorisation from the Drugs Controller General of India for Rituximab and Afibercept biosimi-
lars, and obtained Phase III trial approval for a second antibody drug conjugate.
• The company acquired an 85.6% stake in Amplitude Surgical SA, adding advanced lower-limb orthopedic technologies and
a robotic surgery system to strengthen its MedTech portfolio.
• The company partnered with Braile Biomédica to commercialise Transcatheter Aortic Valve Implantation (TAVI) technology
in Europe, India, and select markets, expanding into interventional cardiology.
• Zydus is building a dialyzer facility and investing Rs. 300cr in MedTech capital expenditure over the next 12-18 months.
• Zydus aims to file over 25 products in 505(b)(2) pipeline, with 15 already filed, thereby enhancing specialty portfolio depth.
• Management anticipates Desidustat approval in China within 12 months, targeting a significant Chronic Kidney Disease
(CKD) anemia treatment market opportunity. (The market size of the CKD molecule in China is ~$1 billion and growing.)
• The company expects CUTX-101 approval in FY26, expanding its rare treatment portfolio.
• Management continues to guide for high-teen to mid-20s growth in the international market.
Revenue R&D spend
EBITDA PAT
Change in Estimates
Old estimates New estimates Change -%
Year / Rs cr FY26E FY27E FY26E FY27E FY26E FY27E
Revenue 24,654 25,333 25,632 26,598 4.0 5.0
EBITDA 6,977 6,359 6,993 6,572 0.2 3.4
Margins (%) 28.3 25.1 27.3 24.7 -100bps -40bps
Adj. PAT 4,885 4,456 4,570 4,257 -6.5 -4.5
EPS 48.5 44.3 45.4 42.3 -6.4 -4.5
[Link]
Consolidated Financials
Profit & Loss Balance Sheet
Y.E March (Rs. Y.E March (Rs.
FY23A FY24A FY25A FY26E FY27E FY23A FY24A FY25A FY26E FY27E
Cr) Cr)
Sales 17,237 19,547 23,242 25,632 26,598 Cash 488 413 827 940 1,089
Accts. Receivable 4,417 5,220 4,025 4,422 4,575
% change 14.1 13.4 18.9 10.3 3.8
Inventories 3,413 3,442 3,944 4,371 4,858
EBITDA 3,860 5,384 7,059 6,993 6,572
Other Cur. Assets 1,699 2,426 8,251 9,320 9,932
% change 15.1 39.0 32.1 1.2 -4.6 Investments 927 968 1,557 1,620 1,718
Depreciation 723 764 916 1,021 1,142 Gross Fixed As-
7,807 8,465 8,654 10,576 12,597
EBIT 3,137 4,620 6,143 5,971 5,430 sets
Interest 130 81 166 158 150 Net Fixed Assets 5,697 5,803 6,042 6,443 6,822
Other Income 187 284 270 364 455 CWIP 1,130 1,112 1,318 1,818 2,318
PBT 2,590 4,809 6,027 6,177 5,735 Intangible Assets 5,895 7,877 8,466 9,057 10,140
% change -8.8 85.7 25.3 2.5 -7.2 Def. Tax -Net 1,262 1,644 2,344 3,089 3,584
Tax 588 978 1,412 1,544 1,434 Other Assets 829 375 429 457 486
Tax Rate (%) 22.7 20.3 23.4 25.0 25.0 Total Assets 25,756 29,281 37,202 41,536 45,523
Reported PAT 2,002 3,831 4,615 4,633 4,301 Current Liabilities 4,356 4,563 5,861 6,147 6,473
PAT att. to com- Provisions 272 310 384 392 399
mon sharehold- 1,960 3,860 4,526 4,570 4,257
Debt Funds 1,195 804 3,213 3,054 2,903
ers
Adj.* 604 14 220 - - Other Liabilities 246 1,503 1,386 1,445 1,418
Adj. PAT 2,565 3,874 4,745 4,570 4,257 Equity Capital 101 101 101 101 101
% change -41.4 51.1 22.5 -3.7 -6.8 Res. & Surplus 17,415 19,729 23,853 27,827 31,480
No. of shares (cr) 101.2 100.6 100.6 100.6 100.6 Shareholder Funds 17,516 19,830 23,953 27,928 31,580
Adj EPS (Rs.) 19.3 38.1 45.0 45.4 42.3 Minority Interest 2,173 2,272 2,405 2,571 2,748
% change -40.7 51.9 22.5 -3.7 -6.8 Total Liabilities 25,756 29,281 37,202 41,536 45,523
DPS (Rs.) 6.0 3.0 11.0 7.5 7.5 BVPS 173 197 238 278 314
Cashflow Ratio
Y.E March FY23A FY24A FY25A FY26E FY27E Y.E March FY23A FY24A FY25A FY26E FY27E
Net inc. + Depn. 2,725 4,596 5,531 5,654 5,444 Profitab. & Return
Non-cash adj. 543 -602 337 -1,493 -872 EBITDA margin (%) 22.4 27.5 30.4 27.3 24.7
Other adjustments - - - - - EBIT margin (%) 18.2 23.6 26.4 23.3 20.4
Net profit mgn.(%) 11.4 19.7 19.5 17.8 16.0
Changes in W.C -579 -797 910 -560 -314
ROE (%) 11.4 19.3 19.3 16.6 13.6
C.F. Operation 2,689 3,196 6,777 3,602 4,257
ROCE (%) 15.0 20.2 20.8 17.8 14.6
Capital exp. -992 -883 -1,661 -1,922 -2,021 W.C & Liquidity
Change in inv. 2,449 -721 -6,367 -654 -1,182 Receivables (days) 93.5 97.5 63.2 63.0 62.8
Other [Link] 78 129 -344 - Inventory (days) 197.4 201.7 227.1 226.2 224.5
Payables (days) 122.9 124.6 132.8 133.0 133.8
C.F - Investment 1,535 -1,475 -8,372 -2,576 -3,203
Current ratio (x) 1.8 2.2 1.9 2.1 2.2
Issue of equity - - - - - 1.0 1.2 1.3 1.4 1.4
Quick ratio (x)
Issue/repay debt -4,007 -1,117 2,406 - - Turnover &Leverage
Dividends paid -267 -621 -303 -754 -756 Gross asset T.O (x) 2.3 2.4 2.7 2.7 2.3
Other [Link] -126 -41 -90 -158 -150 Total asset T.O (x) 0.6 0.7 0.7 0.7 0.6
C.F - Finance -4,400 -1,779 2,014 -912 -905 Int. covge. ratio (x) 24.2 56.9 37.0 37.9 36.3
Chg. in cash -177 -58 419 114 148 Adj. debt/equity (x) 0.1 0.0 0.1 0.1 0.1
Valuation
Closing Cash 488 413 827 940 1,089
EV/Sales (x) 3.1 5.3 4.0 4.1 3.9
EV/EBITDA (x) 13.6 19.3 13.3 14.9 15.8
P/E (x) 25.5 26.4 19.7 21.8 23.4
P/BV (x) 2.8 5.1 3.7 3.6 3.2
[Link]
Recommendation Summary - (last 3 years) Dates Rating Target
19-Aug-21 BUY 632
09-Feb-22 BUY 465
31-May-22 BUY 440
17-Feb-23 ACCUMULATE 528
22-Aug-23 BUY 750
29-May-24 ACCUMULATE 1,196
16-Apr-25 BUY 975
03-Sep-25 BUY 1,121
Investment Rating Criteria
Ratings Large caps Midcaps Small Caps
Buy Upside is above 10% Upside is above 15% Upside is above 20%
Accumulate - Upside is between 10%-15% Upside is between 10%-20%
Hold Upside is between 0% - 10% Upside is between 0%-10% Upside is between 0%-10%
Reduce/sell Downside is more than 0% Downside is more than 0% Downside is more than 0%
Not rated/Neutral
Definition:
Buy: Acquire at Current Market Price (CMP), with the target mentioned in the research note; Accumulate: Partial buying or to accumulate as CMP dips in the future; Hold: Hold the
stock with the expected target mentioned in the note.; Reduce: Reduce your exposure to the stock due to limited upside.; Sell: Exit from the stock; Not rated/Neutral: The analyst has
no investment opinion on the stock.
Symbols definition: Upgrade No Change Downgrade
To satisfy regulatory requirements, we attribute ‘Accumulate’ as Buy and ‘Reduce’ as Sell.
The recommendations are based on 12 month horizon, unless otherwise specified. The investment ratings are on absolute positive/negative return basis. It is possible that due to
volatile price fluctuation in the near to medium term, there could be a temporary mismatch to rating. For reasons of valuations/ return/lack of clarity/event we may revisit rating at
appropriate time. Please note that the stock always carries the risk of being upgraded to BUY or downgraded to a HOLD, REDUCE or SELL.
Not rated/Neutral- The analyst has no investment opinion on the stock under review.
DISCLAIMER & DISCLOSURES
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securities. This report has been prepared by the Research Team of Geojit Investments Limited, hereinafter referred to as GIL.
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[Link]
