Motilal Oswal has issued a Neutral rating on Zydus LifeSciences with a target price of ₹1,125 in its research report dated August 11, 2026. According to the brokerage's assessment, the company delivered largely in-line revenue and EBITDA performance in the first quarter of FY27, though earnings came in lower than expected due to higher depreciation, interest outgo and tax rate for the quarter. Analyst projections suggest earnings may exhibit a 5% compound annual growth rate (CAGR) from FY26 to FY28, reflecting ongoing investments in product development and market expansion initiatives.
The quarter's performance was aided by robust growth in domestic formulation (DF), emerging markets and acquisitions. As reported by Motilal Oswal, Zydus LifeSciences has been outperforming the industry in DF for the past three years. The company has outpaced IPM in key therapies including cardiology, diabetology, gynecology, dermatology and super specialty areas of oncology and nephrology. However, the North American market has faced pressures, recording decreased sales for the second consecutive quarter due to intensified competition.
For the quarter ending June 30, 2023, Zydus LifeSciences achieved a 22% increase in revenue to ₹80.2 billion, exceeding analyst expectations. However, the company faced significant profitability challenges with net profit declining 36% to ₹9.4 billion. The EBITDA fell by 7.8% to ₹18.7 billion, with margins contracting by 750 basis points to 23.4%. The gross margin also declined by 70 basis points to 72.1%, reflecting increased operating costs and higher depreciation, interest expenses, and tax obligations.
Motilal Oswal values Zydus LifeSciences at 23x 12-month forward earnings to arrive at the price target of ₹1,125. According to the brokerage's analysis, the company continues to invest in building its own differentiated product pipeline, adding new growth levers through acquisitions, and marketing efforts to sustain industry-beating growth in the DF segment. The company received priority review from the United States Food and Drug Administration (USFDA) for Saroglitazar magnesium, highlighting its commitment to innovation in the pharmaceutical sector.
