Buy Zydus Lifesciences; target of Rs 750: Geojit

Geojit's research report on Zydus Lifesciences

Zydus Lifesciences Ltd. is one of India’s leading vertically integrated pharmaceutical companies, with presence across the value chain, from manufacturing of finished dosage forms to active pharmaceutical ingredients, animal healthcare products, and wellness products. In Q1FY24, the company’s consolidated revenue rose a significant 29.6% YoY to Rs. 5,140cr, primarily propelled by the US formulations business, which surged 57.4% YoY. EBITDA also rose a sharp 80.7% YoY, and EBITDA margin expanded 830bps YoY to an all-time high of 29.3% due to lower commodity prices. New product launches, sustained growth in the US market, and benefits from investments in research and development (R&D) should continue to support the company’s earnings performance.

Outlook

Hence, we upgrade to BUY rating on the stock, with a revised target price of Rs.750 based on 24x FY25E adjusted earnings per share.

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