Zydus Lifesciences Posts Slight Profit Dip Despite Strong Sales Growth

Zydus Lifesciences Ltd. reported a consolidated net profit of ₹11.71 billion for the March quarter, down nearly 1% on year and missing analysts’ expectations of ₹13.73 billion. The profit decline was due to a 31% jump in tax outgo to ₹4.23 billion and a one-time cost of ₹2.20 billion.

However, the company recorded double-digit sales growth in the quarter, with revenue rising nearly 18% on year to ₹65.28 billion and 24% sequentially. US sales grew 24%, driven by volume expansion and new product launches.

Research and development expenses for the quarter stood at ₹4.8 billion, representing 7.4% of revenue. EBITDA rose 30% on year to ₹21.26 billion, while the EBITDA margin improved by 310 basis points to 32.6%.

US formulations sales grew 24% year on year on higher volumes and new launches. International and India formulations sales increased 12% and 11%, respectively.

The ₹2.20 billion one-time cost includes ₹1.4 billion due to impairment of goodwill related to the company’s Brazil business and ₹846 million impairment of a product-related intangible asset held by Zydus Worldwide DMCC, a wholly owned subsidiary.

For 2024-25, net profit grew 18% to ₹45.26 billion, while consolidated net revenue rose nearly 19% to ₹232.42 billion.
India formulations sales rose 11% on year to ₹15.39 billion, driven by pillar brands and innovation products. Consumer wellness sales increased 17% to ₹9.08 billion, supported by strong volume growth. The personal care segment saw double-digit growth due to higher consumer traction.

US formulation sales accounted for 50% of overall sales, growing sequentially each quarter, driven by volume and new launches. Revenue from US formulations rose 24% year on year and 30% sequentially to ₹31.31 billion. The company received approval for 24 new products, including five tentative approvals, and launched 17 new generics and three speciality brands in 2024-25.

The board appointed Tushar Shroff as Chief Financial Officer, effective September 1. The company plans a final dividend of ₹11 per share, pending shareholder approval at the AGM on August 12.

Pharmaceutical division revenue rose over 18% to ₹56.17 billion, while consumer products sales jumped to ₹9.11 billion from ₹7.80 billion a year ago.

International market formulation sales grew nearly 12% to ₹5.55 billion, driven by strong demand across geographies.

The only segment with a decline was active pharmaceutical ingredients (API), down over 10% to ₹1.29 billion. Sales in India, including formulations and consumer wellness, rose 13% to ₹24.48 billion. Within India, branded formulations rose 11% on year, supported by pillar brands and innovation products. Secondary sales in India grew 10%, outpacing the market.