Zydus Lifesciences Limited

Zydus Lifesciences delivered a robust financial performance in Q2 FY26, with consolidated revenues reaching ₹61.2 billion, marking a 17% year-on-year growth. The company maintained strong operating profitability, achieving an EBITDA margin of 32.9%, an improvement of 500 basis points year-on-year. This led to an EBITDA of ₹20.2 billion, up 38% year-on-year, and a net profit of ₹12.6 billion, also up 38% year-on-year. The EBITDA margin for the first half of FY26 stood at 32.3%.

The company completed two significant acquisitions: UK-based Comfort Click Limited (CCL) to strengthen its international presence in digital consumer healthcare, and the remaining 14.4% stake in Amplitude Surgical, completing 100% acquisition in the MedTech space. Zydus plans to leverage Amplitude's portfolio to expand in orthopedics, nephrology (with a new dialyzer membrane facility commissioning next year), and cardiology (utilizing existing stents and in-licensed TAVI). The MedTech business is expected to grow in double digits.

The US formulations business reported revenues of ₹27.4 billion, growing 14% year-on-year, driven by volume expansion and new product launches. Zydus filed six ANDAs, received four approvals, and launched seven new products during the quarter. In the specialty segment, the company launched Beizray, an albumin-solubilized docetaxel injection, and is on track to file the NDA for Saroglitazar Magnesium for PBC with the USFDA in Q4 FY26, with a potential launch in 14-15 months.

India's branded formulations business continued its growth momentum, outpacing market growth with a 9% year-on-year increase, particularly in chronic segments like cardiology, gynecology, and oncology. The consumer wellness business recorded revenues of ₹6.4 billion, up 31% year-on-year, significantly boosted by the Comfort Click acquisition, which focuses on vitamins, minerals, and supplements. The chronic portfolio's contribution to revenue increased by 500 basis points over the last three years to 44.5% as per IQA MAT September '25.

The international markets formulations business demonstrated strong growth, posting revenues of ₹7.5 billion, up 39% year-on-year, with broad-based performance across emerging markets and Europe. In vaccines, Zydus launched VaxiFlu, India's first trivalent influenza vaccine, and received regulatory approval to initiate Phase II clinical trials for its Bivalent Typhoid Conjugate vaccine in India. The company plans to participate in global tenders for vaccines, with annual UNICEF typhoid vaccine tender volumes ranging between 80 to 100 million doses.

Beyond Saroglitazar, Zydus's innovation pipeline includes CUTX-101, which has completed all development work and is slated for launch between January and June 2026. The company expects R&D intensity to remain consistent as it continues studies on Saroglitazar, Usnoflast, and new trials for Recurrent Pericarditis. The doubling of intangible assets under development from ₹1,300 crores to ₹2,600 crores in the last six months is attributed to licensing and acquisition-related technical know-how and brand valuations.

The company's primary capital allocation objective is to deleverage its balance sheet. The board approved an enabling QIP resolution to provide flexibility for tapping capital markets for future strategic investments, particularly in US specialty, international markets, and MedTech. Management aims to keep the net debt to EBITDA ratio below one time^📎 without acquisitions, and to reduce it back to one time^📎 if it temporarily crosses two times due to acquisitions.

Zydus received EIR reports with voluntary action indicated from the USFDA for its oncology injectable manufacturing facility in Ahmedabad and Baddi formulations facility, following inspections in June and August 2025, respectively. The company is committed to maintaining a 26% plus EBITDA margin for the full financial year, despite the integration of lower-margin businesses like Comfort Click, indicating confidence in overall operational efficiency and growth drivers.