Prabhudas Lilladher's research report on Zydus Lifesciences
CDH base business adjusted for gRevlimid was soft. Company’s steady domestic franchise, strong balance sheet and potential new launches like gRevlimid will help to negate pricing pressure and likely competition in some key products like gAsacol in US. Further company has initiated cost efficiency programs. It is also working on a robust pipeline of complex products including injectables, transdermals, NCE, biosimilars and vaccines which will materialize over the next 2–3 years. Our FY23-25E EPS stands revised by 11-17% as we factor in gRevlimid.
Outlook
Given recent run up in stock price and current valuations of 21x P/E on FY24E (adj. for gRevlimid), we downgrade stock to ‘Accumulate’ from Buy with revised TP of Rs465 based on 21x Sept 2024E earnings plus Rs15/share for gRevlimid.
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