ICICI Direct has given Hold recommendation for Zydus Lifesciences with a target price of Rs. 405 in its research report issued on Aug 13, 2022

ICICI Direct’s research report on Zydus Lifesciences

Zydus is a leading pharma company with family pedigree having a presence in domestic branded formulations, US generics and is in the process of repurposing itself into niche areas of specialty pharmaceuticals, biosimilars and vaccines. FY22 revenue break-up – US: 39%, India: 32%, Wellness: 13%, Europe & emerging markets including countries in LatAm, Asia Pacific & Africa: 10% • Zydus is the fourth largest pharma company in India with 14 brands among Top 300 pharma brands in India and nine with Rs 100 crore+ sales.

Outlook

We maintain HOLD rating as we wait for 1) consistency from US business in terms of continued traction in base business, new launches and steadiness in price erosion besides pending cGMP resolution. We value Zydus Lifesciences at Rs 405 (base business of Rs 381 at 16x P/E on FY24E EPS of Rs 23.8 + NPV of Rs 26.7 for gRevlimid opportunity).

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