Zydus Lifesciences has reported a Q2 EBITDA of Rs 14.2 billion, which is a 33% increase compared to the previous year. This aligns with market expectations.

Despite a 25% decline in stock price over the past three months, analysts are still optimistic about the company's prospects. The decline in stock price is due to concerns over product concentration risk and increased competition in the generic Asacol market. However, the company is supported by a strong domestic presence, a solid balance sheet, and anticipated new product launches in the U.S. market. These new launches are expected to help mitigate pricing pressures. Zydus is also working on a diverse pipeline of complex products, including injectables, oncology treatments, biosimilars, and vaccines. Management projects 2-3 high-value launches in fiscal years 2027 and 2028.

Prabhudas Lilladher has maintained an 'Accumulate' rating for Zydus Lifesciences and adjusted the target price to Rs 1,050. This is based on a valuation of 25 times the estimated earnings per share for FY27. The firm's earnings projections have been revised downward by approximately 10% to account for anticipated lower U.S. sales, reduced margins, and increased tax liabilities.