Zydus Lifesciences Q1 Review: Systematix Maintains 'Hold', Revises Target Price — Here's Why

North America revenue now stands at 49% of the total revenue for Zydus Lifescience. The contribution from gMirabegron and gRevlimid remains disproportionately high in overall earnings.

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Systematix Report

Zydus Lifesciences Ltd. Q1 FY26 revenues (Rs 65,737 million) were in-line with estimates, but Ebitda (Rs 20,885 million) and Net earnings (Rs 14,668 million) were below our estimates.

Revenue was up 7% YoY and 3% QoQ, led by International Formulations business (37% YoY). India formulations business grew 8% YoY, while US formulations grew by 3% YoY (flat in $ terms).

North America revenue now stands at 49% of the total revenue for Zydus Lifescience. The contribution from gMirabegron and gRevlimid remains disproportionately high in overall earnings.

In case new high value launches (which are usually unpredictable) do not fructify, there is a substantial risk of earnings decline in FY27. gMirabegron contribution continuity in FY27 hinges on the court outcome (Q4 FY26).

We currently assume gMirabegron to reduce in FY27 (considering unfavorable district court ruling).

We revise our estimates as we incorporate Amplitude Surgicals in our model for FY26 and beyond. Our revised target price stands at Rs 1,020, based on 25x FY27 EPS, and we retain a Hold on the stock.

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