ZYDUSLIFE

Zydus Lifesciences’ revenue stood at INR 65,279 Mn., up 18.0% YoY (+23.9% QoQ), above our estimates by 4.4% led by stronger growth across geographies. EBITDA came in at INR 21,649 Mn., up 33.2% YoY (+79.7% QoQ), sharply above our estimates (+41.7%), driven by higher gross margins and controlled operating expenses. Adjusted net profit stood at INR 14,299 Mn., up 21.5% YoY (+70.0% QoQ), above our estimates (+9.4%), led by better operational performance, partially offset by INR 394 Mn. of forex loss and INR 2,196 Mn. of impairment charge on goodwill and know-how. We have revised our FY26E/FY27E EPS estimates by -12.8%/-19.9%, as we bake in moderated (i.e., single digit) revenue growth in the US led by pricing pressure and higher base, strong growth in domestic market led by market share gain in chronic segment and new growth areas like biologics and vaccines across international markets for FY26E. Outlook Further, we have moderated our EBITDA margins for both FY26 and FY27, driven by absence of Revlimid sales and pricing pressure in the US. We value Zydus Lifesciences at 21x FY27E EPS, implying a target price of INR 1,069. We maintain our “BUY” rating on the stock.