Buy Zydus Lifesciences, target price Rs 425: Prabhudas Lilladher

Prabhudas Lilladher has buy call on Zydus Lifesciences with a target price of Rs 425. The current market price of Zydus Lifesciences is Rs 368.9. Time period given by analyst is one year when Zydus Lifesciences Ltd. price can reach defined target.

Zydus Lifesciences Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 36926.40 Crore) operating in Pharmaceuticals sector.

Zydus Lifesciences Ltd. key Products/Revenue Segments include Pharmaceutical Products, Other Operating Revenue and Export Incentives for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 4138.60 Crore, up 4.96 % from last quarter Total Income of Rs 3942.90 Crore and up 2.01 % from last year same quarter Total Income of Rs 4057.00 Crore. Company reported net profit after tax of Rs 554.30 Crore in latest quarter.

Investment Rationale
CDH reported in line operating performance. Company’s steady domestic franchise, strong balance sheet and potential new launches like gRevlimid will help to negate pricing pressure and likely competition in some key products like gAsacol in US. Further company has initiated cost efficiency programs. It is also working on a robust pipeline of complex products including injectables, transdermals, NCE, biosimilars and vaccines which will materialize over the next 2–3 years. Our FY23E and FY24E EPS stands cut by 8% and 5%. At CMP, stock is trading at 17x FY24E EPS.

Promoter/FII Holdings
Promoters held 74.88 per cent stake in the company as of 30-Jun-2022, while FIIs owned 2.86 per cent, DIIs 11.95 per cent.