Zydus Lifesciences Accumulation Recommendation with a Price Target of Rs 1,080 from Prabhudas Lilladher

Zydus Lifesciences Exceeds Estimates in Q4, Maintains Steady Outlook

Zydus Lifesciences (ZYDUSLIF) has reported a significant increase in its EBITDA for the fourth quarter, surpassing the estimates of Prabhudas Lilladher's research report. This improvement can be attributed to higher revenues across key markets. Despite this, the research report suggests that the base business remains steady with mild erosion.

The company is working on a robust pipeline of complex products, including injectables, 505(b)2, transdermals, NCE, biosimilars, and vaccines, which are expected to materialize over the next 2-3 years. However, the report anticipates that US sales will remain largely flat over the financial years 2026-2028, given sales erosion in some key products. Consequently, the report expects flat EPS Compound Annual Growth Rate (CAGR) adjusted for forex over the same period.

The management has guided for 2-3 high-value launches over financial years 2027-2028, with timely launch being a crucial factor in sustaining momentum in US sales.

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Outlook Remains Steady

Prabhudas Lilladher's research report maintains its 'Accumulate' rating for Zydus Lifesciences, with a target price of INR 1,080. This valuation is based on a price-to-earnings ratio of 23 times the estimated earnings per share for financial year 2028.

Note: The table above provides a comparison of the target price of Zydus Lifesciences for the financial years 2026-2028, based on the estimated earnings per share and price-to-earnings ratio.

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