Zydus Lifesciences Q2 Results: Profit Falls In Line With Estimates

Net profit dropped 83% over a year earlier to Rs 523 crore in the three months ended September.

<div class="paragraphs"><p>(Source: Unsplash)</p></div>
(Source: Unsplash)

Zydus Lifesciences Ltd.’s second-quarter after-tax profit dropped but was in line with estimates.

Net profit stood at Rs 523 crore in the quarter ended September, down 83% over a year earlier, according to an exchange filing by the Ahmedabad-based drugmaker. That compares with the Rs 545 crore consensus estimate of analysts tracked by Bloomberg.

Zydus Lifesciences Q2 FY23 Highlights (YoY)

  • Revenue up 10% at Rs 4,135 crore, against an estimate of Rs 4,057 crore.

  • Ebitda was down 9% at Rs 815 crore, against an estimate of Rs 859 crore.

  • The margin stood at 19.7% compared to an estimate of 21.2%.

Other Highlights (YoY)

  • India contributed 43% of the total revenue for the quarter. Total India revenue grew by 6%. Excluding sales of Covid-19-related portfolio, the business grew 11%.

  • Revenue from India's formulation business rose 4% (including Covid), while that from the consumer wellness segment rose 12%.

  • Revenue from North American formulation sales rose by 16%, contributing to 43% of total sales. The company filed three ANDAs and received approval for 15 new products, including two tentative approvals, during the quarter. It also launched 10 new products.

  • Emerging markets formulation sales, which make up 8% of the revenue for the quarter, rose 24%.

  • Europe's formulations revenue was down 11%. This makes up 1% of the revenue for the quarter.

  • Sales of active pharmaceutical ingredients fell by 17%. This contributes to 3% of the revenue.

  • Research and development investments for the quarter stood at Rs 253 crore, which was 6.1% of the revenue.

New launches, including gRevlimid, aided U.S. growth while India formulations continued to deliver double-digit growth, excluding Covid-related revenues, Sharvil Patel, managing director at Zydus Lifesciences, said in the exchange filing.

"We expect to improve our profitability steadily going ahead, and remain on track to deliver 20% plus Ebitda margins for the current fiscal."

Updates On U.S. FDA Inspections Of Facilities

  • The U.S. FDA issued an Establishment Inspection Report with Voluntary Action Indicated status to Moraiya formulations facility indicating the closure of inspection.

  • The U.S. FDA inspected the animal health formulations facility located in Ahmedabad SEZ between Sept. 23-29, 2022, which concluded with two Form 483 observations.

Patel said that they were delighted with the resolution of regulatory issues at Moraiya.

Shares of Zydus Lifesciences were trading 1.19% lower after the results were announced, compared with a 1.72% rise in the benchmark S&P BSE Sensex at 11:58 a.m.