Zydus Lifesciences: A Quarter of Robust Growth and Strategic Expansion

Zydus Lifesciences Limited, a prominent player in the global pharmaceutical landscape, has announced its unaudited consolidated financial results for the second quarter and half year ended September 30, 2025. The company delivered a robust performance, showcasing healthy growth across its key business segments, underpinned by strategic acquisitions and a strong R&D pipeline. This quarter's results reaffirm Zydus' commitment to sustainable growth and patient-centric innovation.

For Q2 FY26, Zydus reported consolidated revenues from operations of 612.32 Crore, marking a significant 17% increase year-on-year. The operating profitability remained strong, with an EBITDA of 201.58 Crore, up 38% year-on-year, and an EBITDA margin of 32.9%, an improvement of 500 basis points over the previous year. Net Profit for the quarter also saw a substantial rise of 38% year-on-year, reaching 125.86 Crore. For the half year (H1 FY26), revenues stood at 1,269.69 Crore, up 11% year-on-year, with an EBITDA of 410.43 Crore (up 16% YoY) and a Net Profit of 272.54 Crore (up 17% YoY).

Segmental Performance and Strategic Initiatives

Zydus' diversified business model proved resilient, with strong contributions from various segments. The India branded formulations business continued its impressive run, outpacing market growth for another quarter with an 8.4% year-on-year increase in sales, reaching 159.31 Crore. This growth was fueled by sustained traction in innovation products and pillar brands, particularly in key therapies like Cardiology, Gynecology, and Oncology. The company also launched VaxiFlu, India's first trivalent influenza vaccine, aligning with global recommendations for flu protection.

The US formulations business delivered strong double-digit growth, with revenues of 274.37 Crore, up 13.5% year-on-year. This was driven by volume expansion and new product launches, including 7 new products during the quarter. Zydus also filed 6 ANDAs and received approval for 4 ANDAs. On the specialty front, the company launched Beizray (albumin solubilized docetaxel injection) in October 2025, further strengthening its 505(b)(2) portfolio. The international markets formulations business also posted strong growth, with revenues of 75.13 Crore, up 39.4% year-on-year, reflecting robust execution across emerging markets and Europe.

Financial Summary

Expanding Horizons and Innovation Pipeline

The consumer wellness business recorded revenues of 63.74 Crore, up 31% year-on-year. A key highlight was the first international acquisition in this space: UK-based Comfort Click Ltd (CCL). This strategic move significantly strengthens Zydus' international presence across the UK, EU, and US, leveraging CCL's position as a fast-growing digital consumer healthcare platform in the high-growth VMS segment. The Medtech business also saw growth, with revenues of 15.32 Crore. Zydus recently completed the 100% acquisition of Amplitude Surgical SA, France, aiming to expand its presence in orthopedics, nephrology, and cardiology.

On the innovation front, Zydus reported positive topline results from the pivotal EPICS-III Phase 2(b)/3 clinical trial of Saroglitazar Magnesium for Primary Biliary Cholangitis (PBC) in the US market. The trial met its primary endpoint, and the company is preparing to file a New Drug Application (NDA) with the USFDA in Q4 FY26, with a potential launch between January and June 2026. Furthermore, Zydus received regulatory approval to initiate Phase II clinical trials for its Bivalent Typhoid Conjugate Vaccine in India. The company also secured USFDA Orphan Drug Designation (ODD) for Desidustat for the treatment of beta-thalassemia and NMPA approval from China for Venlafaxine Extended-Release Capsules.

Operational Excellence and Financial Prudence

Zydus' commitment to operational excellence was evident with its oncology injectable manufacturing facility at SEZ1, Ahmedabad, and Baddi formulations facility receiving Establishment Inspection Reports (EIR) with Voluntary Action Indicated (VAI) status from the USFDA. The SEZ II Ahmedabad formulations facility received an EIR with No Action Indicated (NAI) status. These positive regulatory outcomes underscore the company's adherence to quality and compliance standards.

Financially, the company's net debt to EBITDA ratio stood at a healthy 0.3x as of September 30, 2025. The Board has also approved a fundraising initiative of up to 5,000 Crore to deleverage the balance sheet, strengthen the capital structure, and fund organic and inorganic growth opportunities. This move reflects a disciplined approach to capital allocation and a clear vision for future expansion.

Segment Contribution to Q2 FY26 Revenue

Outlook and Strategic Direction

Zydus Lifesciences is poised for continued growth, driven by its diversified business model and strategic focus on innovation. The company aims to maintain its EBITDA margin above 26% for the full year and expects no major reduction in R&D intensity. With a strong pipeline of product launches, including 25+ for the year, and ongoing investments in high-growth areas like MedTech and specialty products, Zydus is well-positioned to capitalize on emerging opportunities. The management's proactive approach to acquisitions and R&D, coupled with sound financial management, reinforces confidence in its long-term growth trajectory and commitment to delivering superior outcomes for all stakeholders.