Zydus Lifesciences Limited — Q3 FY26 earnings call

Call held 10 Feb 2026

Management summary

Zydus Lifesciences delivered a strong Q3 FY26, with consolidated revenues growing 30% YoY to ₹68.6 billion and EBITDA up 31% to ₹18.2 billion, driven by robust performance across all key segments. The company launched new specialty products and secured key regulatory approvals, while managing the impact of exceptional expenses on net profit and anticipating margin adjustments from recent acquisitions.

Highlights

  • Consolidated revenues of ₹68.6 billion, up 30% on a year-on-year basis.

  • EBITDA for the quarter stood at ₹18.2 billion, up 31% on a year-on-year basis.

  • Operating profitability remained strong with an EBITDA margin of 26.5%, up 20 basis points on a year-on-year basis.

  • North America business registered revenues of ₹28 billion, up 16% year-on-year, driven by sustained volume expansion and new products.

  • India branded formulation business sustained its growth trajectory with a robust 14% year-on-year growth outperforming the market.

Concerns

  • Net profit for the quarter, adjusted for exceptional expense on account of the new labor code impact and acquisition related cost, was ₹11.1 billion, up 9% year-on-year (lower growth than revenue/EBITDA).

  • Revlimid trajectory is on a downward trend and will not contribute in the next quarter.

  • Acquisitions (Comfort Click, Amplitude) will have lower margins than the current base business, potentially impacting blended margins.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹6,860 Cr
    YoY +30%
  • Consolidated EBITDA
    ₹1,820 Cr
    YoY +31%
  • Consolidated EBITDA Margin
    26.5%
    YoY +0.2%
  • Adjusted Net Profit
    ₹1,110 Cr
    YoY +9%

9M FY26

  • EBITDA Margin
    30.3%

What they filed

Q1 FY27: revenue up 11.0%, net profit down 11.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,621 2,516 5,820 2,588 2,871 +10%2,284 −9%3,741 −36%2,872 +11%
EBITDA942 648 3,773 585 1,152 +22%199 −69%1,989 −47%587 +0%
Net profit790 471 2,814 385 1,157 +46%296 −37%1,722 −39%340 −12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • North America Business
    ₹2,800 Cr Revenue
  • India Branded Formulation
    14% Growth
  • International Markets Formulation
    ₹790 Cr Revenue
  • Consumer Wellness
    ₹960 Cr Revenue
  • Medical Devices
    ₹300 Cr Revenue

Capital allocation

high confidence
  • Debt Net ₹3,000 Cr
    So, on our net debt basis, we are 3,000 crores of debt, as of now, and I would say that's because of, obviously, the large acquisitions that we have done recently.
  • M&A Comfort Click Acquisition · Integrated

    Deepened portfolio and reinforced position in high-growth wellness categories.

    Full quarter of consolidation in Q3 FY26, contributing to 113% YoY growth in Consumer Wellness.

    We recorded revenues of ₹9.6 billion, up 113% year-on-year with full quarter of consolidation of Comfort Click business in this quarter.
  • M&A Amplitude Surgical Acquisition · Integrated

    First full quarter consolidation of the business.

    Contributed ₹3 billion in revenue to Medical Devices segment.

    The business performed registered revenue of ₹3 billion. This was the first full quarter consolidation of our Amplitude Surgical's business.
  • M&A Pembrolizumab and Ranibizumab Acquisition · Signed

    Licensing of 2 large molecules to accelerate proprietary pipeline and maximize capacity utilization of biologics manufacturing facility.

    In the US biosimilar space, we have attained a critical milestone with the licensing of 2 large molecules, Pembrolizumab and Ranibizumab.
  • M&A Myriad Genetics Joint venture · Signed

    Expanded presence in diagnostics area through strategic collaboration, introducing 3 advanced tests (MyChoice, MyRisk, Prolaris) to strengthen precision oncology ecosystem.

    During the quarter we expanded our presence in the diagnostics area through a strategic collaboration with Myriad Genetics of the US, introducing 3 advanced tests, viz MyChoice, MyRisk, and Prolaris, and thereby strengthening the country's precision oncology ecosystem.
  • Liquidity Liquidity disclosed Internal accruals and cash flows are sufficient for ongoing operations; QIP for ₹5,000 crores is an enabling provision for future meaningful acquisitions.
    It is mostly contingent on, if we get to see any major opportunity. As I said, our internal accruals are, I mean, and cash flows are sufficient for us to continue to do what we need to do without fund raise. Fund raise is an enabling provision for us to use if we feel that we need to, provided we can see any meaningful acquisition.

Guidance & targets

Profitability

  • R&D spend as % of revenue Profitability · FY26 · High confidence 7.5%-8%
    So, R&D, as I said, we expect a 7.5%-8% of our revenue for FY26.

    — Dr. Sharvil Patel

  • EBITDA Margin Profitability · Quarter 4 · High confidence 23% plus
    We will still track at 23% plus margin in the Quarter 4.

    — Dr. Sharvil Patel

Revenue Growth

  • International Markets Revenue Growth Revenue Growth · near future (2-3 years) · Medium confidence 20% plus
    Yeah, we see meaningfully 20% plus growth continuing for the near future.

    — Dr. Sharvil Patel

  • India Business Revenue Growth Revenue Growth · next 2-3 years · High confidence double-digit growth
    Yes, I think, we have a strong momentum for our innovative brands... So, we are quite bullish on double-digit growth for India.

    — Dr. Sharvil Patel

Revenue

  • Vaccines Business Revenue Revenue · next 3 to 4 years · High confidence ₹1,000 crores plus
    In the next 3 to 4 years we want to have a thousand crore plus business on vaccines, for sure.

    — Dr. Sharvil Patel

Product Launch

  • Saroglitazar Commercialization Start Product Launch · H2 FY27 · High confidence second half of FY27
    But I would say the commercialization will be second half of FY27.

    — Dr. Sharvil Patel

Business Development

  • Bio CDMO Business Size Business Development · next 2-3 years · Medium confidence meaningful
    So, in the next 2-3 years, say, we would have a meaningful Bio CDMO business.

    — Dr. Sharvil Patel

Product Launches

  • Number of US Generics Launches Product Launches · FY27 · High confidence 40 to 45 plus products
    we have plans to launch 40 to 45 plus products in FY'27

    — Dr. Sharvil Patel

  • Number of Sizable US Specialty Launches Product Launches · next two years · High confidence 4 to 5
    we have very important launches, 4 to 5 sizable launches that we will get to see.

    — Dr. Sharvil Patel

M&A/Licensing

  • Number of BD&L deals M&A/Licensing · almost every year · Medium confidence one or two deals
    We hope to at least get one or two deals almost every year.

    — Dr. Sharvil Patel

What to watch in Q4 FY26

Mirabegron Litigation Outcome

next quarter
Current Trial started, mediation ongoing
Target Resolution or clearer indication of competitive landscape

Why it matters

Will determine future revenue contribution from a key US product.

And the court has directed the parties for mediation while the trial is proceeding. So, that's where we are today.

Risks & concerns

  • Revlimid Revenue Decline

    high

    Revlimid trajectory is downward, and no contribution expected next quarter.

    Management acknowledged

  • Mirabegron Litigation Outcome

    medium

    Ongoing trial and mediation for Mirabegron, outcome uncertain, potential impact on US revenue.

    Analyst not addressed

  • Margin Impact from Acquisitions

    medium

    Comfort Click and Amplitude acquisitions have lower margins than base business, potentially impacting blended margins in subsequent quarters.

    Analyst acknowledged

  • R&D Spend Lumpiness

    low

    R&D spend can be lumpy due to clinical trials, leading to fluctuations in quarterly expenses.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Mirabegron litigation and competitive landscape Evasive
No, I mean, it's difficult to say. Look, Lupin has settled from what we hear today morning. So, there is some writeup there. But I would still refrain from saying anything till after the trial or after the mediation.

Mirabegron is a significant contributor; the outcome of the trial and competitive entry will impact future US revenue.

Asked by Saion Mukherjee

Agenus CDMO business revenue timeline and potential size Partial
But I would say the commercialization will be second half of FY27... in the next 2-3 years, say, we would have a meaningful Bio CDMO business.

Provides clarity on the timeline for revenue contribution from a new strategic growth area.

Asked by Neha Manpuria

R&D cost increase and future run rate Direct
So, R&D, as I said, we expect a 7.5%-8% of our revenue for FY26. That's what we guided for. There is always lumpiness to R&D in the third quarter...

Explains the higher R&D spend this quarter and reiterates the full-year guidance, addressing concerns about cost escalation.

Asked by Saion Mukherjee

Impact of Comfort Click and Amplitude acquisitions on blended margins Direct
I think that is a on a blended basis margin is lower than the current margin scenario or our reported margin, our base business margin, excluding Revlimid. That is the kind of margin what the acquisitions would be having. So, given that there is a kind of a visible pressure on the margin on the subsequent quarters, that is it looks like.

Management acknowledges potential margin pressure from recent acquisitions, providing transparency on future profitability.

Asked by Surya Patra

Palbociclib (licensed product) opportunity timeline Partial
So, that we can't answer because if the pediatrics exclusive is granted then it will be FY'28, otherwise it could be FY'27.

Clarifies the timeline for a key pipeline product, dependent on regulatory outcomes.

Asked by Bino

QIP fundraising purpose Direct
It is mostly contingent on, if we get to see any major opportunity. As I said, our internal accruals are, I mean, and cash flows are sufficient for us to continue to do what we need to do without fund raise. Fund raise is an enabling provision for us to use if we feel that we need to, provided we can see any meaningful acquisition.

Explains that the QIP is for opportunistic M&A rather than immediate funding needs, indicating a strong balance sheet.

Asked by Devang Sarawgi

GLP-1 strategy in India and product novelty Direct
So, I think Surya, there may have been some misunderstanding, we will be in the first wave of launches, when it comes to India launch... So, we have a new formulation where it's a very significant ease to the patient in terms of use. Also, there is a very meaningful benefit in terms of cost...

Clarifies Zydus's position as a first-wave entrant in the Indian GLP-1 market and highlights the differentiated aspects of their product.

Asked by Surya Patra

Ranibizumab competitive landscape and launch timeline Partial
So, as I just said, we hope to enter by the second half of the year. That's where we are planning for launch. There is definitely an opportunity where there is not enough biosimilars available on Ranibizumab in the market and we see that as an opportunity.

Provides a timeline for a significant biosimilar launch and assesses market opportunity.

Asked by Gaurav Tinani

3 min read 7 chapters

Detailed narrative

Strong Q3 FY26 Performance Across Segments

Zydus Lifesciences reported robust financial results for Q3 FY26, with consolidated revenues reaching ₹68.6 billion, marking a 30% year-on-year increase. This growth was broad-based, with all key businesses contributing significantly. EBITDA for the quarter stood at ₹18.2 billion, up 31% YoY, leading to a strong operating profitability with an EBITDA margin of 26.5%, a 20 basis point improvement over the previous year. Adjusted net profit for the quarter was ₹11.1 billion, up 9% YoY, after accounting for exceptional expenses related to new labor code impact and acquisition costs.

North America and Specialty Portfolio Expansion

The North America business, encompassing the United States and Canada, generated revenues of ₹28 billion, growing 16% year-on-year. This was primarily driven by sustained volume expansion and new product launches, with 18 ANDAs filed, 8 approvals received, and 4 new products launched during the quarter. A key highlight was the launch of BEIZRAY (albumin-solubilized docetaxel injection), the company's first oncology 505(b)(2) product, and the final USFDA approval for Zycubo (copper histidinate) for Menkes disease, further strengthening the specialty and rare disease portfolio.

India Formulations and Chronic Segment Leadership

Zydus's branded formulation business in India continued its strong growth trajectory, achieving a 14% year-on-year increase and outperforming the market. This growth was fueled by persistent traction in innovation products and pillar brands, with the chronic segment consistently expanding its contribution, reaching 45.3% of the portfolio as per IQVIA MAT December 2025. The company maintained its leadership in Oncology therapy and expanded its presence in diagnostics through a strategic collaboration with Myriad Genetics, introducing three advanced tests.

International Markets and Consumer Wellness Growth

The International Markets formulation business demonstrated accelerated growth, posting revenues of ₹7.9 billion, up 38% year-on-year, driven by strong demand in both emerging markets and Europe. The Consumer Wellness business also saw significant growth, with revenues of ₹9.6 billion, up 113% YoY, benefiting from the full consolidation of the Comfort Click business. This segment expanded its portfolio with new adult and probiotic gummy variants and Pure Himalayan Shilajit Resin, reinforcing its position in high-growth wellness categories.

Innovation and Strategic Initiatives

Zydus is actively pursuing innovation, with plans to file Saroglitazar Magnesium with the USFDA for PBC indication and regulatory approval received in India to initiate Phase III clinical trials for its second biosimilar ADC. The company also initiated a Phase II trial for Bivalent Typhoid Conjugate vaccine and secured global tenders for rabies and typhoid conjugate vaccines. On the MedTech front, the proprietary Andy robotic surgical system received CE mark approval, confirming its compliance with European standards for safety, performance, and quality.

M&A and Capital Structure

The company's disciplined M&A strategy, including the acquisitions of Comfort Click and Amplitude Surgical, and licensing of biosimilars (Pembrolizumab and Ranibizumab), has been instrumental in activating new growth engines. Zydus reported a net debt of ₹3,000 crores, primarily due to recent large acquisitions. A shareholder approval for a ₹5,000 crore QIP was secured, intended as an enabling provision for future meaningful acquisitions, as internal accruals and cash flows are currently sufficient for operations without immediate fundraising.

Future Outlook and Margin Expectations

Management guided for R&D spend to be 7.5%-8% of revenue for FY26, acknowledging the lumpiness of R&D expenses. Despite the downward trajectory of Revlimid and potential margin pressure from newly acquired businesses like Comfort Click and Amplitude, the company expects to maintain a "23% plus" EBITDA margin in Q4. Significant product launches are planned for FY27, including 40-45 US generics and 4-5 sizable specialty products, with Saroglitazar commercialization expected in H2 FY27, and a meaningful Bio CDMO business anticipated in the next 2-3 years.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls