Brokerage Prabhudas Lilladher has maintained an 'Accumulate' rating on Zydus Lifesciences with a target price of ₹1,200. While the firm remains positive about the company's future product pipeline, investors should also note the recent June quarter results, where net profit fell 36% due to rising costs and margin pressure.
Prabhudas Lilladher has reiterated its 'Accumulate' rating on Zydus Lifesciences, setting a price target of ₹1,200. The stock is currently trading around ₹1,201. This outlook comes as the brokerage evaluates the pharmaceutical major's long-term transition strategy and its ability to build a new product portfolio.
The brokerage’s positive stance is driven by Zydus Lifesciences' shift toward a more complex range of products. The company is actively focusing on injectables, biosimilars, and transdermal systems to move beyond its reliance on older products, such as gRevlimid. These new, higher-value offerings are expected to start contributing more significantly to revenues over the next two to three years.
However, investors looking at the company's immediate performance will find a more mixed picture. In its first-quarter results for the financial year 2027, which ended on June 30, 2026, the company reported a revenue growth of 22% year-on-year, reaching ₹8,017 crore. Despite this top-line expansion, the bottom line saw a notable decline. Net profit fell by 36% to ₹940 crore, largely due to higher employee, operating, and finance costs compared to the previous year.
Profitability has become a key area for shareholders to monitor. In the recent quarter, EBITDA margins contracted by 770 basis points to 24.1%. This drop underscores the challenges the company faces, including intense competition and the costs associated with integrating acquisitions and funding new research.
The company’s future growth is heavily tied to its performance in the US market, where analysts are projecting a 5% compound annual growth rate through the financial year 2028. This growth target relies on the timely execution of upcoming high-value product launches. If the company faces delays in these launches or if pricing pressure in the US generic market remains high, it could place further strain on margins.
Looking ahead, investors will be paying close attention to management’s strategy for balancing expansion costs with profit improvements. The company is scheduled to participate in the Motilal Oswal 22nd Annual Global Investor Conference on August 18, 2026, which may offer more clarity on its operational priorities and future financial roadmap.