Buy Zydus Lifesciences; target of Rs 1201: KR Choksey

KR Choksey's research report on Zydus Lifesciences

Zydus Lifesciences’ revenue was largely in-line with our estimates. EBITDA missed our estimates due to lower-than-expected gross profit and higher-than-expected other expenses. However, Adj. PAT was in-line with our estimates as EBITDA miss was offset by lower-thanexpected tax expenses. We maintain our FY26E/FY27E EPS estimates at INR 52.2 and INR 63.6 respectively, as we believe US business will accelerate in FY27E with exclusive product launches, domestic business is set to benefit from chronic therapy expansion and double-digit growth in Consumer Wellness with strategic acquisitions. Currently, the stock is trading at a PE multiple of 19.6x/16.1x based on FY26E/FY27E EPS, respectively.

Outlook

We roll over our valuation multiple to FY27E and assign a PE multiple of 18.9x to arrive at a target price of INR 1,201 (unchanged) and maintain our “BUY” rating.

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