Sharekhan's research report on Zydus Lifesciences
Q2FY24 was a mixed bag, where revenue rose 8% y-o-y but declined 15% q-o-q to Rs. 4259 crore on account of lower US sales. US sales grew by 9% y-o-y but declined 24% q-o-q to Rs. 1865 crore due to NIL Revlimid sales. Ex-Revlimid, the company hiked prices in the base portfolio in domestic region, while the US saw no price erosion. Product launches, volume growth in base portfolio and cost rationalization aided a 623 bps hike in EBITDA margins to 26%. Company maintained its guidance of double-digit growth in the US and in-line performance in India region for FY24E.
Outlook
We maintain a Buy with a revised PT of Rs. 687. Stock trades at an attractive ~21.7x/18.4x FY2024e/FY2025e EPS estimates, as compared to peers that trade at ~25x/ 22x its FY24 and FY25E EPS estimates.
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