Zydus Life Q3 Results Beat Estimates, Revenue Soars 30%

Introduction

Zydus Lifesciences Ltd. announced a robust financial performance for the third quarter of fiscal year 2026, ending December 31, 2025, surpassing market expectations across all major parameters. The company's strong results triggered a positive investor response, with its shares gaining as much as 5% on Monday, February 9, 2026. The performance was underpinned by significant growth in revenue and operational profitability, driven by sustained momentum in both domestic and international markets.

Stellar Financial Performance in Q3

Zydus Lifesciences reported a consolidated revenue from operations of ₹6,865 crore, marking a substantial 30.3% year-on-year (YoY) increase from ₹5,269 crore in the same quarter of the previous fiscal year. This figure comfortably exceeded the CNBC-TV18 poll estimate of ₹6,294.3 crore. The company's operational efficiency was also on full display, with Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) growing by 31% YoY to ₹1,817 crore, up from ₹1,388 crore. This performance also surpassed the Street's expectation of ₹1,516 crore.

The company's EBITDA margin saw a slight expansion to 26.5% from 26.3% in the year-ago period, beating the consensus estimate of 24%. Net profit for the quarter stood at ₹1,042 crore, a 2% increase from ₹1,023.5 crore in Q3 FY25 and higher than the analyst projection of ₹940 crore. The financial results also noted a forex gain of ₹164 crore for the quarter.

Key Financial Highlights: Q3 FY26 vs Q3 FY25

Broad-Based Segmental Growth

The impressive top-line growth was fueled by strong performances across all key business segments. The India formulations business continued its steady trajectory, posting a sales growth of 12.9% YoY and outperforming the broader Indian Pharmaceutical Market (IPM). The chronic segment was a key contributor, expanding its share within the company's portfolio to 45.3%.

International operations also delivered exceptional results. The North America business, a critical market for Zydus, saw sales increase by 16.4% YoY, supported by four new generic launches. The broader International Markets segment recorded accelerated growth of 38.2% YoY, reflecting strong demand across various regions.

Consumer Wellness and Acquisition Impact

A standout performer was the Consumer Wellness business, which reported a remarkable 113.4% YoY growth. This surge was significantly influenced by the full-quarter consolidation of the recently acquired Comfort Click Limited (CCL). While this acquisition dramatically boosted revenue, it also brought associated costs. The Zydus Wellness segment reported a consolidated net loss of ₹399 million, primarily due to higher interest expenses from acquisition funding, along with increased depreciation and amortization charges linked to the acquired brands. Management has indicated that FY26 is expected to be the 'bottom for profitability' for this segment, with cash EPS accretion from the acquisition anticipated from FY27 onwards.

Innovation and Regulatory Pipeline

Zydus Lifesciences maintained its focus on innovation, with R&D expenditure for the quarter amounting to ₹607.4 crore, or 8.8% of revenues. The company achieved several key regulatory and research milestones. It received USFDA approval for Zycubo®, a therapy for the rare Menkes disease. Furthermore, the company is preparing to file a New Drug Application (NDA) for Saroglitazar Magnesium with the USFDA. In its biotech pipeline, Zydus received approval to begin Phase III clinical trials for its second biosimilar ADC in India and initiated Phase II trials for a Bivalent Typhoid Conjugate Vaccine.

Market Reaction and Outlook

The strong quarterly report was well-received by the market. On February 9, 2026, shares of Zydus Lifesciences surged 5% to an intraday high of ₹933.35. The stock demonstrated robust investor confidence following the announcement. Management expressed satisfaction with the sustained growth momentum, stating that the company is well-positioned for future growth through strong portfolio execution in the US, market share gains in India, and strategic leveraging of its global presence. The company remains focused on achieving its long-term growth and profitability goals.

Conclusion

Zydus Lifesciences' third-quarter results for FY26 highlight a period of strong operational execution and strategic growth. The significant increase in revenue and EBITDA, coupled with progress in its R&D pipeline, paints a positive picture. While the costs associated with the Comfort Click acquisition impacted the bottom line of the wellness segment, the move is positioned as a long-term strategic investment. Investors will be watching closely to see if the company can maintain this momentum and deliver on its profitability targets in the coming quarters.