Zydus operating cash reaches Rs 3,162.3 crore in H1 2026

Zydus Lifesciences Limited generated Rs 3,162.3 crore of net cash from operating activities in the half year ended September 30, 2026, up from Rs 1,220.7 crore a year earlier, but investing outflows of Rs 4,129.4 crore and financing outflows of Rs 449.4 crore reduced cash and cash equivalents to Rs 669.2 crore.

How much operating cash did Zydus generate in H1 2026?

Zydus generated Rs 3,162.3 crore of net operating cash in the half year ended September 30, 2026, compared with Rs 1,220.7 crore in the corresponding half year ended September 30, 2025. Cash generated from operations before income taxes reached Rs 4,062.7 crore, against Rs 2,245.9 crore a year earlier, while net income taxes paid declined to Rs 900.4 crore from Rs 1,025.2 crore.

Operating profit before working-capital changes increased to Rs 3,860.6 crore from Rs 3,459.9 crore. Adjustments added Rs 1,229.8 crore in the latest half year, compared with an adjustment reducing cash by Rs 189.3 crore in the prior-year period. Depreciation and amortisation rose to Rs 1,134.5 crore from Rs 538.4 crore, and interest expense included in the adjustments increased to Rs 285.2 crore from Rs 181.8 crore.

Working-capital movements contributed Rs 202.1 crore in the latest half year, compared with an outflow of Rs 1,214 crore in the year-earlier period. Trade receivables declined by Rs 1,456.3 crore, whereas they had increased by Rs 590.2 crore a year earlier. This inflow was partly offset by a Rs 1,055.8 crore increase in inventories and a Rs 387.6 crore decrease in trade payables.

Where did Zydus deploy its cash during the half year?

Zydus used Rs 4,129.4 crore in investing activities in the half year ended September 30, 2026, lower than Rs 5,467.4 crore used in the corresponding 2025 period. Payments for acquisition of businesses were Rs 1,563 crore, down from Rs 5,463.7 crore, while purchases of property, plant and equipment and intangible assets increased to Rs 1,261.2 crore from Rs 867.5 crore.

The investing outflow also included Rs 554.4 crore of contingent-consideration payments, compared with Rs 274.7 crore a year earlier. Zydus purchased non-current investments worth Rs 483.4 crore, versus Rs 14 crore in the prior-year half, and made net purchases of current investments of Rs 192.6 crore. Bank balances not treated as cash equivalents increased by Rs 320.6 crore, compared with a Rs 227.9 crore release in the preceding period.

The filing disclosed several business transactions relevant to the investment programme. Zydus completed the cash tender offer for Assertio Holdings, Inc. on June 16, 2026, for approximately USD 166.4 million on a fully diluted basis. It also disclosed that Zydus MedTech (France) SAS acquired 85.6% of Amplitude Surgical SA on July 29, 2025 and subsequently acquired the remaining share capital, with a stated cost of EUR 300 million.

Balance-sheet movements reflected additions to operating and acquired assets. Property, plant and equipment stood at Rs 9,276.2 crore on September 30, 2026, compared with Rs 9,230.7 crore on March 31, 2026. Capital work-in-progress rose to Rs 1,635.8 crore from Rs 1,165.7 crore, goodwill increased to Rs 7,817.9 crore from Rs 7,531 crore, and other intangible assets rose to Rs 8,004.1 crore from Rs 7,228.1 crore.

How did the buyback and borrowings change Zydus financing cash flow?

Zydus used Rs 449.4 crore in financing activities in the half year ended September 30, 2026, compared with an inflow of Rs 4,044.7 crore in the year-earlier period. The latest period included Rs 1,106.3 crore spent on the equity buyback, including tax and transaction costs, and Rs 99.7 crore of dividends paid, compared with Rs 1,105.7 crore of dividends in the prior-year half.

The Board approved a buyback of Rs 1,100 crore on May 19, 2026, initially at a price not exceeding Rs 1,150 per equity share. The Buyback Committee raised the price to Rs 1,260 per share on May 27, 2026. Zydus extinguished 8,730,158 equity shares, representing 0.87% of total equity shares, on June 18, 2026, reducing paid-up equity share capital by Rs 80 lakh.

Financing flows included Rs 1,587.6 crore of proceeds from non-current borrowings and Rs 837.4 crore of repayments, alongside Rs 343.5 crore of net current-borrowing proceeds. Interest paid rose to Rs 284.5 crore from Rs 105.5 crore, while lease-liability payments were Rs 52.6 crore. At September 30, 2026, non-current borrowings were Rs 4,106.2 crore and current borrowings were Rs 9,143.4 crore, compared with Rs 3,188 crore and Rs 8,581.5 crore respectively at March 31, 2026.

Why did Zydus cash and cash equivalents decline despite operating inflows?

Zydus ended September 30, 2026 with Rs 669.2 crore of cash and cash equivalents because its Rs 4,129.4 crore investing outflow and Rs 449.4 crore financing outflow exceeded the Rs 3,162.3 crore operating inflow. Cash and cash equivalents declined by Rs 1,416.5 crore during the half year, compared with a Rs 202 crore decline in the corresponding 2025 period.

The cash bridge included Rs 1,223.5 crore of cash and cash equivalents from acquired subsidiaries and a Rs 7 crore positive foreign-exchange effect. Opening cash and cash equivalents were Rs 855.2 crore at March 31, 2026. After the cash-flow movements, acquired-subsidiary cash and foreign-exchange effect, Zydus reported the Rs 669.2 crore closing balance.

Cash equivalents represented only part of the liquidity categories disclosed in the filing. Cash and cash equivalents, other bank balances, current investments and fixed deposits with maturities above 12 months totalled Rs 5,217.1 crore at September 30, 2026, compared with Rs 7,070 crore at September 30, 2025. Current investments declined to Rs 3,664.1 crore from Rs 4,286 crore, while other bank balances declined to Rs 882.6 crore from Rs 1,900.9 crore.

Conclusion

Zydus produced substantially more operating cash in the half year ended September 30, 2026, supported by lower trade receivables and higher operating profit before working-capital changes. However, cash deployment on business acquisitions, contingent consideration, property and intangible assets, investments and the buyback exceeded the operating inflow, resulting in a lower cash-equivalent balance at period end.

The next disclosures to watch include the purchase-price allocation for Assertio and the acquired Agenus facilities, both of which remain provisional under Indian Accounting Standard 103, or Ind AS 103. Zydus also disclosed completion of its acquisition of the active pharmaceutical ingredients business of Sterling Biotech Limited on November 2, 2026, creating another transaction whose financial effects may appear in later results.