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Informist, Friday, Oct. 11, 2024

 

By Sunil Raghu

 

AHMEDABAD - Zydus Lifesciences Ltd.'s consolidated net profit is seen rising 22% from a year ago to INR 9.8 billion in the quarter ended September, led by growth in the India formulations business and a lower base of the US business, according to an average of estimates of eight brokerages.

 

Sequentially, the bottom line in Jul-Sept is seen down 31% from INR 14.2 billion in Apr-Jun. The estimates of net profit by the brokerages range from INR 8.8 billion by Motilal Oswal Financial Services Ltd. to INR 11.8 billion by Systematix Shares and Stocks (India) Ltd.

 

The drugmaker's net sales are expected to rise 22% on year to INR 53.3 billion from INR 43.7 billion, according to the average of the estimates. Sequentially, the net sales are seen falling 14% from INR 62.1 billion. The estimates range from INR 51.3 billion by Nuvama Wealth Management Ltd. to INR 56.5 billion by Sharekhan Ltd.

 

Systematix expects the domestic branded formulations revenue to rise 7% on year, while PhillipCapital (India) Pvt. Ltd. sees it driving the net profit in the Jul-Sept quarter.

 

Though most brokerages expect the company's US revenue to fall sequentially in Jul-Sept, they expect it to rise from a year ago because of a lower base. Brokerages see US revenues contracting between mid-single-digit to high teens sequentially in Jul-Sept.

 

Brokerages said they don't expect much contribution from Revlimid, used for treating myelomea – the cancer of plasma cells. Revlimid, which was launched in Jul-Sept last year, was expected to be the key new product for the company in the US. Antique Stock Broking Ltd. and Systematix expect the company's US sales to contract by 15% and 19%, respectively, on a sequential basis. PhillipCapital expects the ramp-up on Myrbetriq, a medicine used to treat overactive bladder, to contribute to the US revenue.

 

With the market share gains in Myrbetriq and the lower contribution from Revlimid, Nuvama sees Zydus Lifesciences' US revenue to be at $277 million, up 23% from a year ago, but down 25% sequentially. Nuvama sees Zydus Lifesciences' wellness business growing in low double-digits on year, but contracting sequentially owing to seasonality.

 

Zydus Lifesciences is yet to announce the date for detailing its Jul-Sept earnings.

 

Earnings before interest, tax, depreciation, and amortisation of the company are seen in the range of INR 13.0 billion to INR 16.4 billion, according to seven brokerages.

 

Analysts said they were looking for an update on the progress of the development of the new chemical entity pipeline, clarity on business prospects related to Mirabegron and progress on scaling up the Liqmeds business from the management of the company. Zydus Life acquired UK-based Liqmeds group for nearly INR 7 billion in October 2023.

 

Today, shares of the company closed at 1064.40 rupees on the National Stock Exchange, up 0.7% from the previous close. 

 

Following are the Jul-Sept earnings estimates for Zydus Lifesciences based on reports compiled by Informist from eight brokerage houses: (in INR million)

 

BROKERAGE	NET SALES	NET PROFIT	EBITDA
Antique Stock Broking Ltd.	54,590	10,097	14,892
Elara Securities (India) Pvt. Ltd.	51,731	10,390	14,756
Motilal Oswal Financial Services Ltd.	54,545	8,810	12,982
Nuvama Wealth Management Ltd.	51,332	9,553	13,962
PhillipCapital (India) Pvt. Ltd.	51,670	8,881	13,183
Prabhudas Liladhar Pvt. Ltd.	53,416	9,887	14,699
Sharekhan Ltd.	56,490	9,040	--
Systematix Shares and Stocks (India) Ltd.	52,491	11,753	16,361
AVERAGE	53,328.13	9,792.63	14,405

 

Ends

US$1 = INR 84.06

 

Edited by Saji George Titus

 

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