Summary
Zydus Lifesciences Limited - Q3 FY26 Earnings Call Summary Tuesday, February 10, 2026 11:00 AM IST
Event Participants
Executives 5 Alok Garg, Arvind Bothra, Dr. Sharvil Patel, Ganesh Nayak, Tushar Shroff
Analysts 7 Bansi Desai, Bino Pathiparampil, Devang Sarawgi, Gaurav Tinani, Neha Manpuria, Nitin Agarwal, Saion Mukherjee
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹6,860 crores | +30% YoY; Driven by acquisitions and double-digit growth in base business. |
| EBITDA | ₹1,820 crores | +31% YoY; Reflects strong operating profitability across key pillars. |
| EBITDA Margin | 26.5% | +20 bps YoY; 9M FY26 margins stood at a higher 30.3%. |
| Adjusted Net Profit | ₹1,110 crores | +9% YoY; Adjusted for labor code impact and acquisition costs. |
| R&D Expenditure | 7.5% - 8.0% of Rev | Guidance maintained for FY26; Q3 spike due to lumpy clinical trial phases. |
| North America Revenue | ₹2,800 crores | +16% YoY; Driven by 11% volume expansion and new specialty launches. |
| India Revenue | Robust 14% growth | Outperformed market; Chronic segment contribution reached 45.3%. |
| Emerging Markets/Europe | ₹790 crores | +38% YoY; Broad-based demand in Europe and therapy-led growth in EM. |
| Consumer Wellness | ₹960 crores | +113% YoY; Includes full consolidation of Comfort Click acquisition. |
| Net Debt | ~₹3,000 crores | Increase due to recent large acquisitions; Management comfortable with leverage. |
Geographic & Segment Commentary
- North America: Business grew 16% YoY despite price erosion in base generics, supported by 11% volume growth and 4 new launches. The segment is pivoting toward specialty with the launch of BEIZRAY (oncology) and the approval of Zycubo for Menkes disease.
- India Formulations: Sustained momentum with 14% growth, led by innovative products (Saroglitazar, Desidustat) and super-specialty leadership in Oncology. Chronic portfolio share expanded by 560 bps over three years to 45.3%.
- International Markets: Recorded 38% YoY growth across Europe and Emerging Markets. Growth is driven by CNS and metabolic therapies in EM, while Europe is scaling up via improved reach and portfolio expansion.
- Consumer Wellness & MedTech: Consumer revenue doubled due to Comfort Click consolidation; organic volume growth remained double-digit. In MedTech, the Andy robotic surgical system received CE mark approval for European markets.
Company-Specific & Strategic Commentary
- Biosimilar Pipeline: Licensed Pembrolizumab (Keytruda biosimilar) and Ranibizumab; aiming for H2 FY27 launch for Ranibizumab and first-to-market status for Pembrolizumab post-2028.
- Agenus Acquisition: Facility transition underway; commercial CDMO supply of BOT/BAL expected to start in H2 FY27, targeting revenue significantly higher than $100M in 3-5 years.
- NCE Momentum: Management plans to file Saroglitazar Magnesium with USFDA for PBC indication shortly; the molecule is already a ₹450+ crore franchise in India.
- Vaccine Strategy: Awarded PAHO and UNICEF tenders for Rabies and Typhoid vaccines; aiming for a ₹1,000+ crore vaccine business within 3-4 years.
- GLP-1 Launch: Confirmed “Day 1” launch for Semaglutide in India post-patent expiry with a novel device/formulation that simplifies dosing for patients.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | 23.0%+ for Q4 FY26 | Despite zero revenue from Lenalidomide and consumer seasonality. |
| US Growth | Sustained growth FY27 | Driven by 40-45 new launches and 4-5 “sizable” exclusive opportunities. |
| International Growth | 20.0%+ for near future | Driven by branded expansion in EM and scaling of European operations. |
| R&D Spend | 7.5% - 8.0% of Sales | Ongoing clinical trials for biologics and Saroglitazar US filing costs. |
| Other Expenses | ₹1,750-1,800 Cr/qtr | Excludes R&D; reflects new base after Comfort Click/Amplitude acquisitions. |
Risks & Constraints
| Risk | Context |
|---|---|
| Product Concentration | Lenalidomide revenue is tapering significantly and is expected to be negligible by Q4 FY26. |
| Litigation Risk | Mirabegron (generic Myrbetriq) is currently in active jury trial and mediation; outcome remains uncertain. |
| Margin Dilution | Recent acquisitions (Comfort Click/Amplitude) carry lower blended margins than the high-margin base business. |
| Clinical/Regulatory | Heavy reliance on the successful US filing and approval of Saroglitazar for PBC to drive the next specialty growth phase. |
Q&A Highlights
US Generic Dynamics & Mirabegron
- Question: What is the status of the Mirabegron trial and competitive landscape? (Saion Mukherjee)
- Answer: Trial began Feb 9th with jury selection; court has directed parties toward mediation. Management refrained from commenting on Lupin’s settlement or competitive entry until trial/mediation concludes (Dr. Sharvil Patel).
CDMO Scaling
- Question: When will the Agenus facility contribute to revenue and how large can it be? (Neha Manpuria)
- Answer: Commercial supply of BOT/BAL starts H2 FY27. It will take 2-3 years to scale into a “meaningful” business, targeting revenue higher than $70-100M (Dr. Sharvil Patel).
Margin Outlook Post-Revlimid
- Question: How will margins look as Revlimid tapers off? (Surya Patra)
- Answer: Guided for 23%+ EBITDA margins in Q4 FY26 even with zero Revlimid contribution, supported by strong India branded performance and US volume growth (Dr. Sharvil Patel).
India Innovation & GLP-1
- Question: Will Zydus be in the first wave of Semaglutide launches in India? (Surya Patra)
- Answer: Yes, will launch “Day 1” post-IP expiry with a novel formulation/device that avoids the need for different pens for different doses, easing patient burden (Dr. Sharvil Patel).
Key Takeaway
Zydus Lifesciences delivered a robust Q3 FY26 with 30% revenue growth, reaching ₹6,860 crores, significantly aided by the consolidation of Comfort Click and Amplitude Surgical. While the high-margin Lenalidomide revenue is effectively exiting the books, the company demonstrated resilience through 11% volume growth in the US base business and a strong 14% outperformance in India. Strategically, the company is pivoting toward a specialty and innovation-led model, evidenced by the upcoming US filing for Saroglitazar (PBC indication), the licensing of oncology biosimilars (Pembrolizumab), and a target to build a ₹1,000 crore vaccine business. Management maintained a confident outlook, guiding for 23%+ EBITDA margins in the absence of Revlimid and projecting 20%+ growth in international markets. Investors should monitor the outcome of the Mirabegron litigation and the ramp-up of the Agenus CDMO facility as key mid-term value drivers.
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