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Informist, Monday, Oct. 27, 2025

 

By Narayana Krishna

 

HYDERABAD - Strong sales traction in the US for the generic overactive bladder drug Myrbetriq is expected to support year-on-year earnings growth for Zydus Lifesciences Ltd. in the September quarter. However, on a quarter-on-quarter basis, earnings may fall as a significant decline in sales of the generic cancer drug Revlimid could weigh on the performance, analysts said.

 

Zydus Life is expected to report a consolidated net profit of INR 10.7 billion, up 17% on year but down 27% on quarter, according to the average of estimates from eight brokerages tracking the company. The revenue for the quarter is seen up by 10% on year but is likely to be down 13% on quarter to INR 59.1 billion, the estimates show.

 

The highest estimate for the company's net profit is INR 12.4 billion from Nirmal Bang Equities Pvt. Ltd. while the lowest estimate is INR 9.4 billion from brokerage Prabhudas Lilladher Pvt. Ltd. The revenue estimates range from a high of INR 64.7 billion from HDFC Securities Ltd. to a low of INR 55.4 billion by ICICI Securities Ltd. Zydus Life is yet to announce a date to detail its September quarter earnings.

 

Analysts have high expectations from the generic Myrbetriq, which Zydus Life is selling at a risk despite losing the initial phase of patent battle with innovator Astellas Pharma. The drug has estimated annual sales of nearly $1.4 billion in the US.

Analysts expect the contribution from this drug may offset the impact of the slowdown in sales of Revlimid and help the company report on-year growth in the US. Brokerage Motilal Oswal estimates Zydus Life's US sales to grow 28% on year to $352 million on a low base, but will fall 5% on quarter due to the fall in sales of Revlimid.

 

While the US accounts for nearly 49% of the company's consolidated sales, India contributes nearly 37%, which includes formulations and consumer wellness segments. Other international markets account for 11% and active pharmaceutical ingredients business contributes nearly 3% to the company's overall sales.

 

HDFC Securities Ltd. and JM Financial expect the company's domestic sales to grow 8% on year. Brokerage Motilal Oswal, on the other hand, expects domestic sales to grow 11.5% on year driven by chronic therapies such as cardiac, respiratory, and antineoplastic. The contribution from acquired French orthopedic company Amplitude Surgical may also contribute to the overall earnings as the process to integrate it is in progress. Zydus Life acquired a majority stake in Amplitude Surgical in July.

 

Analysts expect Zydus Life's earnings before interest, tax, depreciation, and amortisation to improve on a year-on-year basis for the latest quarter, led by a change in product mix and fall in other expenses. They estimate the company's September quarter EBITDA margin will be in the range of 25.0% to 28.7% against 27.0% a year ago. The average of estimates from eight brokerages for Zydus Life's September quarter pegs EBITDA at INR 16.6 billion.

 

Market participants will watch out for an update on the integration of Amplitude Surgical and market share gains of generic drug Myrbetriq.

 

Of the 18 research reports on the company available with Informist, 12 have a 'buy' or equivalent rating on the stock with an average target price of INR 1,030. Five brokerages have a 'hold' rating on the stock with an average target price of INR 964 and one has a 'sell' rating with price target of INR 900 per share.

 

The stock has risen over 6% since the announcement of its June quarter earnings on Aug. 12. Shares of the company ended at INR 1,013.85 on the National Stock Exchange, up nearly 1% from the previous close. 

 

Following are the Jul-Sept earnings estimates for Zydus Lifesciences Ltd. from eight brokerage firms in the descending order by the estimate of net profit:

 

Brokerage name	Net Sales	Net Profit	EBITDA
	--in million rupees--
Nirmal Bang Equities Pvt Ltd	61,838	12,362	18,502
Systematix Shares and Stocks (India) Ltd	57,900	12,193	18,058
HDFC Securities Ltd	64,677	11,903	18,562
Motilal Oswal Financial Services Ltd	60,247	10,792	16,568
ICICI Securities Ltd	55,391	9,742	15,731
JM Financial Institutional Securities Pvt Ltd	57,245	9,416	15,345
Nuvama Wealth Management Ltd	57,324	9,409	15,478
Prabhudas Lilladher Pvt Ltd	58,020	9,396	14,532
Average	59,080	10,651	16,597

 

End

 

US$1 = INR 88.24

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

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