Hold Zydus Lifesciences: target of Rs 910: ICICI Securities

ICICI Securities's research report on Zydus Lifesciences

Zydus Lifesciences (Zydus)’s Q1FY26 print beat our expectations, though its revenue grew a mere 5.9% while EBITDA/ PAT shrunk 3.3%/0.7% YoY. US biz sales were flat YoY. The company has started facing pricing headwinds in gRevlimid and the outcome of the litigation in Feb’26 shall be crucial for supplies of Mirabegron beyond Q4FY26. In the near term,
its pipeline of 505 b(2) products like Sitagliptin and Docetaxel would aid strength to its US biz. India biz growth of 8% was in-line with IPM and the trend is likely to sustain in quarters ahead. Management maintains its single-digit growth guidance in US in FY26. Gross/EBITDA margin guidance of ~64%/26% for FY26 is retained. We cut FY26E/FY27E earnings by ~1% to factor in slightly lower margins. Retain HOLD with TP of INR 910, based on 22x FY27E earnings. Outlook

We cut our FY26E/FY27E earnings by ~1% each to factor in lower margins. At CMP, the stock trades at valuations of 22x FY26E and 23.4x FY27E earnings, and EV/EBITDA of 13.5x FY26E and 13.6x FY27E. Maintain HOLD with an unchanged target price of INR 910, based on 22x FY27E EPS (unchanged).

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