Zydus Lifesciences: A US driven qtr; M&A execution to reflect over medium-term

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Zydus Lifesciences: A US driven qtr; M&A execution to reflect over medium-term

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Zydus Lifesciences

A US driven qtr; M&A execution to reflect

over medium-term

Reiterate Rating: NEUTRAL | PO: 1,025 INR | Price: 1,019 INR

Strong 4Q driven by US 19 May 2026 Corrected

Zydus reported a better-than-expected qtr with 6% revenue beat aided by higher US Equity

revenue QoQ (likely driven by higher Mira post settlement) & reflected in higher margins

in the qtr (25% vs. BofAe 23%). However, there was also a meaningful increase in D&A

Key Changes(Rs5bn vs. Rs3.6bn in 3QFY26) reflecting the impact from acquisitions completed over

the last year & Mira settlement. While there is visibility on US revenue over FY27-28 (Rs) Previous Current

with its high value products (Mira, gIbrance) & specialty/505(b)(2) portfolio, we believe Price Obj. 980.00 1,025.00

this is factored into valuations. While Zydus has invested in diversified growth drivers 2027E Rev (m) 302,220.3 312,342.1

(Medtech, CDMO, digital consumer health, specialty, 505(b)(2)), we believe confidence in 2028E Rev (m) 337,240.4 351,732.4

the scale-up of these as larger revenue contributors is key for re-rating. Reiterate Neutral. 2029E Rev (m) NA 373,826.1

2027E EPS 40.01 40.63

2028E EPS 45.02 46.72Earnings upgrade on FY27 guidance?

The high teen revenue growth guidance partly reflects full contribution of its acquisition 2029E EPS NA 43.75

(MedTech, Comfort Click) with organic growth being high single digit aided by domestic/

International, in our view. The single-digit US revenue growth despite lack of gRevlimid Neha Manpuria >>

Research Analyst

does indicate meaningful contribution from specialty/505(b)(2) portfolio & Mira being BofAS India

higher in 1HFY27 given recent share gain.