Zydus Lifesciences Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Zydus Lifesciences Ltd trades at ₹1,119, in a confirmed uptrend and 16 weeks into that stage. That is +7.8% against its own 200-day average. It sits at 78% of a 52-week range of ₹864 to ₹1,191. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 3 straight weeks.

Today the stock is in a confirmed uptrend — week 16 of stage 2, confirmed. At ₹1,119 it trades +7.8% versus its 200-day average and sits at 78% of its 52-week range (₹864–₹1,191).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +225% while the NIFTY 500 moved +267% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 3 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Zydus Lifesciences Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: CONTRACTION. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. Zydus is in an FY27 earnings reset: India branded growth and specialty optionality must offset the loss of peak-margin contributions, while normalized valuation is expensive despite a near-median trailing multiple.

From the numbers. The weekly PE/PB snapshot reports 21.2x PE, equal to its 21.2x median and at the 47th percentile, with a MID_CONTRACTION snapshot. Deterministic normalization is the governing cycle verdict: operating cycle is…

From the price. Price stage 2, week 16 — above its 200-day line, relative strength falling.

From the research. Zydus is in an FY27 earnings reset: India branded growth and specialty optionality must offset the loss of peak-margin contributions, while normalized valuation is expensive despite a near-median trailing multiple.

🚨 Where they disagree. The weekly PE/PB snapshot reports 21.2x PE, equal to its 21.2x median and at the 47th percentile, with a MID_CONTRACTION snapshot. Deterministic normalization is the governing cycle verdict: operating cycle is CONTRACTION, margins are FALLING, and the verdict is FAIRLY_PRICED. Its trailing PE is 23.1x and normalized PE is 31.1x, at the 92nd percentile. The surface read therefore does not support cheap or trough language. The raw weekly snapshot and normalized curve use different trailing-series vintages; the normalized valuation is used for the thesis verdict.

What is proven. Zydus is in an FY27 earnings reset: India branded growth and specialty optionality must offset the loss of peak-margin contributions, while normalized valuation is expensive despite a near-median trailing multiple.

What is not proven yet. India branded formulations growth below 10% YoY together with consolidated EBITDA margin below 22% for two consecutive quarters, or a Complete Response Letter for Saroglitazar PBC that removes the FY28 commercialization path.

🚨 What would change our mind. India branded formulations growth below 10% YoY together with consolidated EBITDA margin below 22% for two consecutive quarters, or a Complete Response Letter for Saroglitazar PBC that removes the FY28 commercialization path.

🚨 Layer 1 read, 22 August 2026 — DROP. Sales up 22% but profit down 35% — the high-margin engine rolled off and the cost base was permanently re-based. In the June 2026 quarter revenue rose 22.0% to ₹8,017 crore while profit fell 34.9% to ₹990 crore and the operating margin collapsed from 34% to 24%. That is not a one-quarter stumble: management has guided the whole of FY27 to about 24% margin, roughly 700 basis points below last year, because the products that carried the peak margin are facing competition and the quarterly cost base has been re-set roughly ₹400 crore higher. On the earnings the company will actually make, the shares are near the expensive end of their own history — the normalized multiple is 31.1 times at the 92nd percentile, not the comfortable 23 times the headline shows.

What would change Layer 1’s mind. Two consecutive quarters with EBITDA margin back above 28% AND the cash conversion cycle falling below 180 days — that combination would prove the reset is a dip the company is financing out of its own cash, not a permanent re-basing, and would move this up the ranking rather than down it. In the other direction, the timeline’s own break — India branded formulations growing under 10% together with consolidated margin under 22% for two straight quarters, or a Complete Response Letter on…

The test written in advance. India branded formulations growth below 10% YoY together with consolidated EBITDA margin below 22% for two consecutive quarters, or a Complete Response Letter for Saroglitazar PBC that removes the FY28 commercialization path. — the thesis as written as stated by the next result.

The test written in advance. US Generic Cliff and Mirabegron Competition — US Generic Cliff and Mirabegron Competition North America revenue and consolidated EBITDA margin against the Q1 FY27 baseline. by the next result.

The test written in advance. Margin and Cost Reset Persists — Margin and Cost Reset Persists Quarterly EBITDA margin at or above 24%. by the next result.

What the company does. Q1 FY27 revenue rose 22.0% YoY to Rs 8,017 Cr, but PAT fell 34.9% YoY to Rs 990 Cr and OPM was 24%, versus 32% a year earlier. India branded formulations grew 20% YoY and international formulations grew 34% YoY, but management reduced its FY27 international-markets outlook to around single digits. The weekly PE snapshot is 21.2x at its median, while the normalized-cycle engine puts normalized PE at 31.1x and the 92nd percentile; the case therefore requires execution, not a multiple-led recovery.

🚨 What the surface reading misses. The surface reading is: FY26 revenue grew 16.8% YoY. The research reads it further: The revenue result establishes a high FY26 comparison base; it does not prove that FY27 profit conversion or segment growth will persist.

🚨 What the surface reading misses. The surface reading is: FY26 PAT increased 9.7% YoY. The research reads it further: PAT grew slower than revenue and precedes the Q1 FY27 PAT decline, so FY26 profit cannot be extrapolated mechanically.

Lever 2 · Value-added mix — BUILDING. India branded formulations grew 20% YoY in Q1 FY27 and chronic and sub-chronic share reached 54.2%. What proves it keeps working: India Branded Formulations and Chronic Mix. It stops working if India formulations growth falls below market growth or the branded portfolio loses price realization.

Lever 12 · New product launch — BUILDING. Saroglitazar PBC has priority review and is targeted for FY28 launch, while Desidustat China access requires another two to three quarters. What proves it keeps working: Saroglitazar and China Desidustat Pipeline. It stops working if Saroglitazar receives a Complete Response Letter or China reimbursement access does not support commercialization.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Zydus Lifesciences Ltd reported ₹8,017 Cr of revenue in the Jun 26 quarter, +22.0% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 11.2% a year. The last full year, FY26, came in at ₹27,148 Cr. The last four reported quarters add to ₹28,591 Cr.

Why this happened. Consumer Wellness revenue was Rs 14.3 billion, up 67% YoY, with the international portfolio up 25% like-for-like and domestic business up 5%. MedTech revenue was Rs 2.8 billion across orthopedics, cardiology, and nephrology.

FY26 revenue came in at ₹27,148 Cr (+16.8% on the year), capping 10 years at 11.2% compound. The latest quarter (Jun 26) printed ₹8,017 Cr, +22.0% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +21.4% growth against the decade's 11.2% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +21.1% over the last 4 quarters against +17.8%/yr over the last 8 — accelerating; TTM profit −2.5% vs +3.1%/yr — rolling over.

FY26-Q4. revenue ₹7,587 Cr and profit ₹1,341 Cr as reported.

FY27-Q1. revenue ₹8,017 Cr and profit ₹990 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Zydus Lifesciences Ltd's operating margin is 24.0% in the Jun 26 quarter, −8.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged 17.0% to 31.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 24.0%, −8.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 17.0%–31.0%, and FY26's 31.0% is the top of that band — a record year.

🚨 Why the margin moved: operating margin went −7.7 pp year on year while gross margin went −0.7 pp — the loss came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

FY26-Q4. revenue ₹7,587 Cr and profit ₹1,341 Cr as reported.

FY27-Q1. revenue ₹8,017 Cr and profit ₹990 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Zydus Lifesciences Ltd earned ₹990 Cr of net profit in the Jun 26 quarter, −34.9% year on year. Full-year FY26 profit was ₹5,124 Cr. The 10-year compound rate is 10.1%. That is 12.3% of the quarter's revenue. The same quarter a year earlier earned ₹1,521 Cr.

Jun 26 profit was ₹990 Cr, −34.9% year on year. On the full year, FY26 printed ₹5,124 Cr (+9.7%), and the 10-year compound rate is 10.1%.

🚨 Why profit moved: revenue contributed +22.0% and the margin −8.0 pp — the quarter was revenue-led despite a thinner margin.

Pace comparison, last four quarters: profit +1.8% vs revenue +21.4%. Profit is growing slower than sales — costs are eating the growth before it reaches the bottom line.

FY26-Q4. revenue ₹7,587 Cr and profit ₹1,341 Cr as reported.

FY27-Q1. revenue ₹8,017 Cr and profit ₹990 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 88% of Zydus Lifesciences Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹2,117 Cr of operating cash against ₹5,124 Cr of profit. After ₹13,386 Cr of capital spending, ₹−11,269 Cr was left as free cash.

FY26: operating cash of ₹2,117 Cr against reported profit of ₹5,124 Cr, leaving free cash of ₹−11,269 Cr after ₹13,386 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 88% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 88%: the cash cycle stretched 64 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving.

Router verdict: the bigger cash user is investment — capital spending ran 5.9× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Zydus Lifesciences Ltd's cash conversion cycle runs 212 days in FY26, up from 148 days in FY21. Capital spending ran ₹18,170 Cr over the last 3 years. At FY26 sales of ₹27,148 Cr each day of that cycle holds about ₹74.4 Cr, so roughly ₹15,768 Cr sits inside the business at any moment.

FY26: debtors at 73 days, inventory at 282 days — roughly 9.3 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 212 days, looser than FY21's 148.

The full loop: cash goes out to suppliers and production on day 0; stock waits 282 days to sell; customers pay about 73 days after that; and suppliers themselves are paid at 142 days — netting out to the 212-day cycle.

In money terms: at FY26 sales of ₹27,148 Cr, each day of the cycle holds about ₹74.4 Cr — so the 212-day loop keeps roughly ₹15,768 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹18,170 Cr over the last 3 fiscal years against ₹3,088 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹3,698 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Zydus Lifesciences Ltd earns a ROCE of 21% in FY26. That is up from a trough of 11% in FY20. Return on invested capital clears the cost of that capital by −1.2 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 18.9% net margin on 0.54× asset turns.

FY26 ROCE is 21%, recovered from a FY20 trough of 11% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 18.9% net margin × 0.54× asset turns × 1.87× balance-sheet leverage ≈ 19.1% on equity. Margin is doing the heavy lifting; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 10.8% − 12.0% = a −1.2 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Zydus Lifesciences Ltd carries total debt of ₹12,515 Cr against shareholder equity of ₹29,582 Cr as of Mar 26, a debt-to-equity of 0.42. On the annual view that ratio went from 0.22 in FY22 to 0.42 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹12,515 Cr against shareholder equity of ₹29,582 Cr — a debt-to-equity of 0.42. On the annual view, debt-to-equity went from 0.22 (FY22) to 0.42 (FY26). Read the returns on this page with that leverage in mind.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions added 1.3 points of Zydus Lifesciences Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 6.9% of the company. Domestic institutions moved −1.3 points over the same window, to 11.3%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: +1.3 points over 8 quarters to 6.9%; Domestic institutions: −1.3 points over 8 quarters to 11.3%; Promoters: +0.0 points over 8 quarters to 75.0%.

Why the register moved: foreign institutions drove it (+1.3 points), absorbed on the other side by domestic institutions (−1.3 points) — steady accumulation by institutions reading the same numbers this page reads.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Zydus Lifesciences Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Zydus Lifesciences Ltd trades at 22.9× P/E, mid-range by its own standards (60th percentile). Its long-run median P/E is 21.8×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 22.9× is mid-range by its own standards (60th percentile), against a long-run median of 21.8× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +11.4% against a +7.1% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +14.9%/yr price move, ~+15.2%/yr came from earnings growth and ~−0.3 pp from the multiple (roughly flat); over 10y, of the +11.1%/yr price move, ~+10.2%/yr came from earnings growth and ~+0.9 pp from the multiple (roughly flat). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 24 August 2026 price, Zydus Lifesciences Ltd was paying for profit growth of about 13.9% a year. Profit itself has compounded 10.1% a year over the past 10 years. Today the market pays 22.9× P/E, the 60th percentile of its own 11-year range.

What the two numbers say together. The multiple is unremarkable against its own past, and the growth the price is paying for is close to what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 24 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Topping out Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Zydus Lifesciences Ltd reads as topping out on its fundamental arc. Topping out — profit and EPS growth have decelerated hard (profit growth +63.3% at its peak → −2.5% latest) while ROCE still reads 21.8%. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: decelerating from a peak is where good stories quietly end — the multiple usually notices late.

4-Factor Sector Score

49.3/100 — rank 20 of 44 in Pharma - Formulators · 100% evidence confidence

Zydus Lifesciences Ltd scores 49.3 out of 100 against the 44 companies it is compared with in Pharma - Formulators, ranking 20. Cheap but unconfirmed: require improving earnings before treating the valuation as an opportunity.

The four contributions add to the total exactly: 11.9 + 16.7 + 13.7 + 7 = 49.3. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Zydus Lifesciences Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

International Markets Growth Outlook Reduced · 11 August 2026. Management's international markets outlook has materially deteriorated without an explanation. In May 2026, management cited 40% plus annual growth and said momentum would continue in the current year, while in Aug 2026 it guided international markets to around single-digit growth; Feb 2026 had also indicated 20% plus growth continuing in the near future.

Vaccine Business Ambition Reduced · 11 August 2026. Management's stated vaccine ambition is materially lower in Aug 2026 than in Feb 2026. Feb targeted a 1,000 crore-plus business over the next 3 to 4 years, whereas Aug described a 300 to 400 crore target and did not explain whether this replaced or narrowed the earlier ambition.

US Launch Plan Reduced · 11 August 2026. US launch expectations have been reduced in Aug 2026 without an explanation. May 2026 called for 40 to 45-plus FY27 launches, while the latest call gave a range of 30 to 40 and at least 30-plus launches, implying a materially lower plan.

Desidustat China Commercialization Timeline Less Certain · 11 August 2026. Desidustat's China commercialization timeline now appears later and less certain than previously indicated. Feb 2026 management hoped for a Q2 FY27 launch, but Aug 2026 said another 2-3 quarters were needed for approvals and access through the reimbursement list, without reconciling the changed timing.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions