Zydus Lifesciences Q4 FY26 earnings call

Zydus Lifesciences delivered a strong performance in FY26, with consolidated revenues reaching ₹271.5 billion, marking a 17% year-on-year growth. The company achieved its highest-ever operating profit and margins, with an EBITDA margin of 31.2%, an 80 basis point improvement over the previous year. For Q4 FY26, consolidated revenues stood at ₹75.9 billion, up 16% YoY and 11% QoQ, while the EBITDA margin significantly improved to 33.7%, an increase of 720 basis points quarter-on-quarter.

The company strategically expanded its footprint through key acquisitions, including UK-based Comfort Click Limited, which established a presence in the international consumer wellness space and is already EPS accretive. The acquisition of French orthopedic firm Amplitude Surgical marked Zydus' entry into the medical devices sector, which reported ₹3.3 billion in FY26 revenue and is expected to gain strong momentum over the next 3-4 years. Additionally, the proposed acquisition of Assertio Holdings aims to bolster the US specialty oncology business, with Rolvedon as a key product.

The North American business recorded revenues of ₹29.5 billion in Q4 FY26, growing 5% QoQ, driven by volume expansion and new product launches. India's branded formulations business outpaced the market with a robust 15% YoY growth in FY26. International Markets Formulations demonstrated strong momentum, with revenues of ₹8 billion, up 45% YoY. The Consumer Wellness business also saw significant growth, with FY26 revenues of ₹14.6 billion, up 61% YoY, including a 31.4% like-to-like growth in the international segment.

Zydus is accelerating its innovation pipeline, with Desidustat tablets receiving approval from the Chinese regulator for renal anemia, and expected to launch in Q2 FY27. The company also initiated a Phase-III trial for a second biosimilar ADC in India and completed clinical development for the in-licensed Pembrolizumab biosimilar candidate, FYB206, towards USFDA filing. In the rare disease space, Zycubo was launched for Menkes disease, and an agreement was signed for Progerinin for Hutchinson-Gilford Progeria Syndrome.

For FY27, Zydus projects high-teens consolidated revenue growth and expects EBITDA margins to be in excess of 24%, despite anticipated competition for Revlimid and Mirabegron. The company plans a capital expenditure of approximately ₹1,500 crore for FY27, with quarterly depreciation around ₹550 crore. An additional ₹70 million investment is earmarked for Saroglitazar's commercialization. The net debt to EBITDA ratio stood comfortably at 0.5x as of March 31, 2026, with management comfortable maintaining around one-times^📎 leverage.

R&D expenses are expected to remain around 8% of revenue in FY27, with a shift towards higher investment in NCEs and biologics. The US specialty business, while currently small, is anticipated to scale up significantly from FY28, leveraging new product launches and strategic partnerships. The biosimilar business in India has already crossed ₹800 crores, with global biosimilar scale-up expected by FY29-FY30.