Target Price: ₹1,080
Current Market Price: ₹1,040.95
Zydus Lifesciences (ZYDUSLIF) reported a Q4 EBITDA that exceeded expectations, driven by increased revenues in key markets. The company appears to have a stable base business, albeit with slight erosion. Year-on-year growth was supported by higher sales in the U.S., along with the integration of MedTech and Comfort Click performance.
Domestic formulations recorded a growth of approximately 14% year-on-year, while the consumer segment saw a significant increase of 61% year-on-year, boosted by a complete quarter of Comfort Click’s performance.
The company is actively developing a robust pipeline of complex products, including injectables, 505(b)(2) applications, transdermals, new chemical entities, biosimilars, and vaccines, which are anticipated to launch over the next 2 to 3 years.
U.S. sales are projected to remain relatively flat for FY26-28E due to erosion in some key product lines, leading to an expected flat EPS CAGR when adjusted for foreign exchange over the same period.
Management has indicated plans for the launch of 2-3 high-value products in FY27E and FY28E, noting that timely launches will be vital for maintaining momentum in U.S. sales. U.S. sales reached $323 million, a 2.5% increase quarter-on-quarter, compared to the estimated $300 million. Emerging markets experienced a robust growth of 51% year-on-year, amounting to ₹730 crore. API revenues remained stagnant year-on-year, while the MedTech division reported revenues of ₹330 crore, a 10% increase quarter-on-quarter.
The FY27/28E EPS estimates are largely unchanged. Consequently, the company maintains an ‘Accumulate’ rating with a target price of ₹1,080, based on a valuation of 23 times the FY28E EPS.
Published on May 20, 2026
