The stock of Zydus Lifesciences, India's fourth-largest pharmaceutical company by market capitalisation, has reached a two-year high following a 33% surge over the past six months. According to reports from Business Standard, the stock is currently trading at ₹1,145, representing a 25 times FY28 earnings estimate, which is above its five-year historical average. The company's strong performance has been driven by robust growth across key markets and successful new product launches, with recent regulatory compliance and chronic therapy-led sales providing additional positive momentum.
The company delivered impressive financial results with overall revenue growth of 21% year-on-year, which exceeded analyst estimates. As reported by Business Standard, domestic formulation growth reached over 19.5%, with Indian operations outperforming the market by 300-500 basis points. The share of higher-margin chronic portfolio has grown to 54% of trailing 12-month revenue, up 360 basis points over the past four years, helping build a stronger and more profitable product mix. Innovation-led products including Saroglitazar and Desidustat posted 30-45% growth, while biologics gained traction across multiple brands, though the contribution of Semaglutide has remained low despite market share gains.
The US formulations business posted sequential growth of 5%, driven by base-business volume expansion, 11 new launches and the debut of Nufymco, a biosimilar for retinal and eye diseases. According to Business Standard, international markets performed strongly with 34% year-on-year growth, led by emerging markets and a turnaround in Europe. The consumer wellness segment grew 67% following the Comfort Click acquisition, while MedTech revenue declined sequentially. The Assertio acquisition completed in May has strengthened Zydus' speciality capabilities, with the company maintaining a robust pipeline of complex products including injectables, 505(b)(2) products, transdermals, new chemical entities (NCEs), biosimilars and vaccines expected to be launched over the next two-three years.
Nirmal Bang Research expects Zydus to sustain healthy growth with revenue rising from ₹27,150 crore in FY26 to ₹33,480 crore in FY28, implying annual growth of 11%. As reported by Business Standard, the company expects the India business to post mid-teens growth and outperform overall pharmaceutical sector growth. PL Research maintains an 'accumulate' rating with a target price of ₹1,200, expecting US sales to grow at 5% annually over FY26-28 despite some product erosion. The brokerage expects two-three high-value launches over FY27 and FY28, with the company's focus on chronic therapy-led sales and complex product development positioning it well for sustained growth across key markets.
A positive development is regulatory compliance, with injectable facilities such as Zydus Biotech Park receiving approval from the US Food and Drug Administration (FDA). According to PL Research, the company has managed the transition well, with the decline in sales of generic Revlimid being offset by new niche launches. The brokerage notes that Zydus is working on a robust pipeline of complex products including injectables, 505(b)(2) products, transdermals, new chemical entities (NCEs), biosimilars and vaccines, expected to be launched over the next two-three years. This regulatory compliance and pipeline strength provide additional confidence in the company's long-term growth prospects across both domestic and international markets.
