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Hidden Gem - Zydus Lifesciences - Quest to change and prosper

ICICIdirect Research 03 Jul 2026 DISCLAIMER

Despite being in the business for so many years along with the likes of Sun, DRL, Cipla and Lupin, Zydus was a kind of laggard due to focus on too many things. That scenario is likely to change as the company is repurposing itself into niche areas of specialty and innovative pharmaceuticals, biosimilars and vaccines besides tactical acquisitions.
The company over the years has invested significantly towards scaling up capability for niche and differentiated products. It is now bearing the fruits for the same with scores of niche launches across the US, India and other geographies and more such launches planned over the next two-three years which should continue the growth momentum.
The management has guided for high teen growth in FY27 along with 24%+ EBITDA margins, despite a high base of cancer drug gRevlimid and the confidence stems from new launches with limited competitive intensity.
We expect the launches (Saroglitazar – used for liver inflammation and Desidustat - used for anaemia in Chronic Kidney Disease) along with others planned can fill the void created by wanning momentum of earlier launches. The company has specifically identified the Rare and Orphan disease segment as the new growth opportunity in the future.
The India business remains strong with both the formulations and Zydus Wellness are expected to maintain strong ~12% growth rate.
Going ahead, traction from its key acquisitions such as EU based implants company Amplitude Surgical along with new launches would be a key monitorable. With key segments holding good for future, we believe the company is in good stead.
Our target price is ₹ 1315 based on 26x FY28E EPS of ₹ 50.6.
 
 

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