1. At a Glance
Zydus Lifesciences (a.k.a. the artist formerly known as Cadila Healthcare) is a ₹96,166 crore pharmaceutical heavyweight with operations spanning generics, branded formulations, vaccines, and biosimilars. They just dropped their Q1 FY26 results: revenue ₹6,574 Cr (+6% YoY), PAT ₹1,467 Cr (+3% YoY). International markets are driving growth, USFDA approvals keep coming in, and acquisitions likeAmplitude Surgicalhint at a more aggressive global expansion. Stock trades at ₹956 with a P/E of ~20.6 — basically, not dirt cheap but not in “bubble pharma” territory either.
2. Introduction
Imagine a company that can treat your fever, make your blood pressure behave, and still have time to launch an arthritis implant business in France — that’s Zydus. Born out of the Cadila split in 1995, it’s grown from ₹250 Cr turnover to ₹23,608 Cr in TTM sales.
FY25 was a blockbuster with ₹4,673 Cr profit, but the stock tanked 24% over the year — because Mr. Market has the attention span of a caffeinated squirrel. The Q1 FY26 numbers show steady but not jaw-dropping growth, proving that even pharma giants need new product pipelines to keep investors hooked.
3. Business Model (WTF Do They Even Do?)
- Generics: Bread-and-butter revenue from the US, India, and emerging markets.
- Specialty & Biosimilars: Higher-margin portfolio including injectables and biotech products.
- Consumer Wellness: Brands like Sugar Free, EverYuth, and Nutralite.
- Animal Health: Because even your dog needs a prescription sometimes.
Diversification is their defensive moat — if one market sneezes, another is already selling the tissues.
4. Financials Overview
- TTM Revenue:₹23,608 Cr
- TTM EBITDA:₹7,063 Cr (EBITDA margin ~30%)
- TTM PAT:₹4,711 Cr (Net Margin
- ~20%)
- Q1 FY26 Revenue:₹6,574 Cr (+6% YoY)
- Q1 FY26 PAT:₹1,467 Cr (+3% YoY)
P/E Recalculation:Q1 EPS = ₹14.58 ⇒ Annualized EPS ≈ ₹58.3CMP ₹956 ⇒ Adjusted P/E ≈16.4(cheaper than reported because of annualization).
Commentary: Profitability is strong, margins are fat, and debt is under control — pharma investors call this “investment grade candy”.
5. Valuation (Fair Value Range)
| Method | Calculation | FV (₹) |
|---|---|---|
| P/E Method | EPS ₹55–58 × P/E 18–20 | 990–1,160 |
| EV/EBITDA | EBITDA ₹7,063 Cr × 12–13 EV/EBITDA – Net Debt ₹(Negative) | 1,050–1,150 |
| DCF (10% WACC, 6% growth) | Based on 5-yr projections | 1,000–1,150 |
Fair Value Range:₹990 – ₹1,150
This FV range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26: Modest growth but solid margins.
- USFDA approvalsfor multiple drugs, including Diltiazem Tablets ($13.9mn annual US potential).
- Amplitude Surgical acquisitionexpands into orthopedic implants.
- Strong US pipeline with ~35 ANDAs pending.
7. Balance Sheet (₹ Cr)
| FY25 | Amount |
|---|---|
| Assets | 36,689 |
| Liabilities | 12,736 |
| Net Worth | 23,953 |
| Borrowings | 3,213 |
Roast: Balance
