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 ₹1,127, in a confirmed uptrend and 10 weeks into that stage. That is +12.4% against its own 200-day average. It sits at 92% of a 52-week range of ₹864 to ₹1,151. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (1 week and counting).

Today the stock is in a confirmed uptrend — week 10 of stage 2, confirmed. At ₹1,127 it trades +12.4% versus its 200-day average and sits at 92% of its 52-week range (₹864–₹1,151).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +227% while the NIFTY 500 moved +276% — behind the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (1 week and counting; last ahead the week of 2026-07-24) — 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.

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 20.7× P/E, mid-range by its own standards (41st percentile). Its long-run median P/E is 21.7×, measured across 10.4 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 20.7× is mid-range by its own standards (41st percentile), against a long-run median of 21.7× measured over 10.4 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

One caveat before moving on: margins are the best this company has ever printed — cheap against its own history on record margins is not the same thing as cheap. If profitability mean-reverts, today's multiple is higher than it looks.

Why the multiple sits where it does: over the past year annual EPS moved +11.4% against a +18.7% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 5y, of the +14.0%/yr price move, ~+19.1%/yr came from earnings growth and ~−5.1 pp from the multiple (compressing); over 10y, of the +11.9%/yr price move, ~+11.4%/yr came from earnings growth and ~+0.5 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.

Stage: Consistent 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 consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROCE at 21.8% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

4-Factor Sector Score

61.2/100 — rank 9 of 43 in Pharma - Formulators · 96% evidence confidence

Zydus Lifesciences Ltd scores 61.2 out of 100 against the 43 companies it is compared with in Pharma - Formulators, ranking 9. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 17.1 + 17.8 + 13.9 + 12.4 = 61.2. 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.

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

Zydus Lifesciences Ltd reported ₹7,587 Cr of revenue in the Mar 26 quarter, +16.2% 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 ₹27,148 Cr.

FY26 revenue came in at ₹27,148 Cr (+16.8% on the year), capping 10 years at 11.2% compound. The latest quarter (Mar 26) printed ₹7,587 Cr, +16.2% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +17.3% 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 +16.8% over the last 4 quarters against +17.8%/yr over the last 8 — stabilising; TTM profit +9.7% vs +13.6%/yr — rolling over.

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 34.0% in the Mar 26 quarter, +1.0 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 is running above every full year in that window.

The latest quarter's operating margin is 34.0%, +1.0 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 +1.1 pp year on year while gross margin went +0.0 pp — the gain 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.

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 ₹1,341 Cr of net profit in the Mar 26 quarter, +7.8% year on year. Full-year FY26 profit was ₹5,124 Cr. The 10-year compound rate is 10.1%. That is 17.7% of the quarter's revenue. The same quarter a year earlier earned ₹1,244 Cr.

Mar 26 profit was ₹1,341 Cr, +7.8% 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 +16.2% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +11.2% vs revenue +17.3%. Profit is growing slower than sales — costs are eating the growth before it reaches the bottom line.

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 +1.1 percentage points, so growth here adds value rather than only size. 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: 13.1% − 12.0% = a +1.1 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. Positive but thin — value creation with little room for error.

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 reads 4.23. A Z-score above roughly 3 reads as safe and below roughly 1.8 as the distress zone, so this sits well clear of distress. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure.

Why it matters: a Z-score of 4.23 sits well clear of the distress zone — the balance sheet is not the risk here.

The safety line in one sentence: the Z-score reads 4.23.

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