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Motilal Oswal Report
Zydus Lifesciences Ltd. delivered a better-than-expected Q4 FY24 performance, driven by increased off-take in the U.S./Europe/active pharma ingredient segments. Zydus Lifesciences saw better growth than the industry in the domestic formulation market.
It ended FY24 on a strong note with 13%/41%/65% YoY growth in revenue/Ebitda/profit after tax.
We raise our earnings estimates by 12%/14% for FY25/FY26 to factor in-
niche launches/increased traction in commercialised limited competition products,
increasing share of chronic therapies in the DF segment, and
a gradual recovery in demand for consumer healthcare products.
We value Zydus Lifesciences at 24 times 12 months forward earnings to arrive at a target price of Rs 1,045.
Zudus Lifesciences is in good stead to maintain growth momentum in its key markets of US/DF.
It continues to work on complex products, including peptides, transdermals and injectables for regulated markets, as well as innovation products for global markets.
While the outlook is promising, the valuation factors in the earnings upside adequately. Maintain Neutral on the stock.
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