Prabhudas Lilladher's research report on Zydus Lifesciences
Zydus Lifesciences (ZYDUSLIF) Q1 EBITDA beat our estimates by 5%. We believe gRevlimid + gMirabegron contributes +45% to total FY25/Q1FY26 EPS which will see erosion from H2FY26. Though, company is working on a robust pipeline of complex products, including injectables, 505(b)2, transdermals, NCE, biosimilars and vaccines, they are expected to materialize over the next 2–3 years. We expect US sales to decline in FY27 given sales erosion in some of key products and thereby expect 7% EPS CAGR decline over FY25-27E. Mgmt have guided for 2-3 high value launches over FY27/28, timely launch will be key to sustaining momentum in US sales.
Outlook
Our FY26/27E EPS broadly remains unchanged. We maintain our ‘Accumulate’ rating with TP of Rs970, valuing at 24x FY27E EPS.
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