Zydus Lifesciences (ZYDUSLIFE) Q2 24/25 earnings summary

Executive summary

• Achieved strong double-digit revenue growth for the quarter, with all key businesses contributing positively.

• India branded formulations outpaced market growth at 10% year-over-year, supported by new product launches and robust volumes.

• Consumer wellness and US formulations businesses delivered robust demand and significant year-on-year growth.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved and reviewed by the Board and Audit Committee on November 12, 2024.

• Both standalone and consolidated results have been subjected to limited review by statutory auditors, with no material misstatements identified.

Financial highlights

• Consolidated revenues reached INR 52.4 billion, up 20% year-over-year.

• Standalone revenue from operations for Q2 FY25 was ₹26,206 million, up from ₹21,593 million in Q2 FY24; consolidated revenue was ₹52,370 million, up from ₹43,688 million year-over-year.

• EBITDA grew 28% year-over-year to INR 14.6 billion; EBITDA margin improved by 170 bps to 27.9%.

• Net profit increased 14% year-over-year to ₹9.1 billion, despite higher tax expenses due to one-offs.

• Net cash position improved to ₹25.9 billion as of September 30, 2024, from ₹8.6 billion at March 31, 2024.

Outlook and guidance

• Confident in achieving high teens top-line growth and year-on-year EBITDA margin improvement for FY25.

• R&D spend expected to be around 8% of revenue for FY25 and near future.

• FY26 US business expected to grow over FY25, with larger opportunities in FY27 and FY28.

• Margins expected to be maintained at FY25 levels or higher, with 27%+ EBITDA margin guidance.

• Acquisition of Naturell (India) Private Limited for ₹3,900 million expected to close within 60 days post-September 30, 2024.