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Informist, Monday, Aug 10, 2026

 

By Eshitva Prakash

 

MUMBAI – Zydus Lifesciences Ltd. is expected to report a sharp fall in its net profit for the June quarter, mainly due to negligible sales of high-margin cancer drug Revlimid in the US. Price erosion in other generics will also drag down the company's US sales. The company's revenue, however, is expected to rise, helped by inorganic growth levers and continued traction in domestic formulation sales, brokerages tracking the company said.

 

Zydus Lifesciences is expected to report a consolidated net profit of INR 10.61 billion for the June quarter, down nearly 28% on year and down over 36% from the March quarter, according to the average of estimates from 13 brokerages.

 

In the trailing quarter, the company had beaten the consensus view on the street by reporting positive bottom line growth, driven by higher-than-expected sales and foreign exchange gains. Nirmal Bang Equities Pvt. Ltd. has the highest estimate for the company's net profit at INR 14.20 billion, while Elara Securities (India) Pvt. Ltd. has the lowest view at INR 9.23 billion.

 

The company's revenue is seen at INR 76.16 billion, up nearly 16% on year and almost flat sequentially, according to the average of estimates. Revenue estimates range from a high of INR 78.27 billion from PhillipCapital (India) Pvt. Ltd. to a low of INR 71.81 billion from 360 ONE Capital Market Pvt. Ltd.

 

This sharp drop in the company's bottom line is because of a high base effect in US sales in the year-ago quarter. Antique Stock Broking Ltd. expects the company's US sales to decline 12% on year to $329 million. ICICI Securities Ltd. expects a near 13% on year fall in US sales to $324 million. PhillipCapital expects an almost 13% sequential decline to $323 million.

 

Other than the absence of sales of generic Revlimid, which used to be a highly margin-accretive drug, the company's business in the US will also be affected by rising competition in sales of the overactive bladder drug Mirabegron, and the colitis drug generic Asacol HD. Settlement fees related to Mirabegron will also eat into the company's profitability. In the March quarter, the company and its US subsidiary paid Astellas Pharma INR 10.60 billion, of which the parent company paid INR 3.98 billion.

 

Generic Mirabegron (Mybetriq) sales will help the company's top line growth, HDFC Securities said. However, royalty fee associated with the drug will affect profitability, the brokerage added.

 

The company's revenue is likely to benefit from strong domestic sales of branded formulations and contribution from recent acquisitions, brokerages said. Three brokerages expect the company's domestic formulation sales to rise 13-15%, primarily because of high sales in chronic therapies such as cardiac and respiratory therapies. In the year-ago quarter, the company reported domestic formulation sales of INR 15.20 billion. Nuvama expects a 28% on year growth in the company's emerging market and European business combined.

 

The June quarter will also see full contribution of MedTech business, Nuvama said. Integration of Amplitude Surgicals and the acquisition of Comfort Click will also help drive growth, other brokerages said.

 

However, inorganic growth will likely not help the company's bottom line in the June quarter. The acquisition cost relating to Assertio Holdings and Amplitude will likely keep the company's profitability in check. Higher freight costs due to the war in West Asia will also affect profitability, HDFC Securities said.

 

The company's earnings before interest, tax, depreciation, and amortisation are expected to fall over 9% on year to INR 18.95 billion, according to an average of 12 estimates.

 

Investors will closely monitor the company's efforts to scale up Comfort Click. They will also look for the US generic launch pipeline, updates on Saroglitazar sales, and synergy realisation from the Amplitude portfolio. The company will report its earnings Tuesday.

 

Of the 14 brokerage reports on the company available with Informist, nine have a "buy" or equivalent recommendation on the stock with an average target price of INR 1,230. This is over 10% higher than the current market price. Four brokerages have a "hold" recommendation at an average target price of INR 1,048, and one says "sell".

 

At 1220 IST, shares of Zydus Lifesciences traded slightly higher than Friday at INR 1,116.70 apiece on the National Stock Exchange. Since the company reported its March quarter earnings, its stock has risen over 9%.

 

Following are the June quarter earnings estimates, in INR billion, for Zydus Lifesciences from 13 brokerages in descending order of the net profit estimate:

 

Brokerage	Net Sales	Net Profit	EBITDA
Nirmal Bang Equities Pvt. Ltd.	75.31	14.20	20.59
Systematix Shares and Stocks (India) Ltd.	74.88	11.52	19.59
ICICI Securities Ltd.	77.37	11.51	21.12
JM Financial Institutional Securities Pvt. Ltd.	77.5	11.30	19.27
HDFC Securities Ltd.	77.44	10.51	18.82
360 ONE Capital Market Pvt. Ltd.	71.81	10.42	--
PhillipCapital (India) Pvt. Ltd.	78.27	10.35	19.41
Motilal Oswal Financial Services Ltd.	76.84	10.32	18.90
Prabhudas Lilladher Pvt. Ltd.	74.92	10.31	18.85
BofA Securities India Ltd.	76.8	9.65	18.82
Antique Stock Broking Ltd.	75.14	9.33	16.91
Nuvama Wealth Management Ltd.	77.84	9.25	17.9
Elara Securities (India) Pvt. Ltd.	75.92	9.23	17.25
Average	76.16	10.61	18.95

 

End

US$1 = INR 95.25 

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

 

Edited by Himanshi Gupta

 

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