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 with 10% year-on-year growth, driven by volume and new products.

• US formulations business grew robustly, supported by volume expansion and new launches.

• International markets, including emerging markets and Europe, delivered strong growth despite external challenges.

• 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.

Financial highlights

• Consolidated revenues reached INR 52.4 billion, up 20% year-on-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 rose 28% year-on-year to INR 14.6 billion; EBITDA margin improved by 170 bps to 27.9%.

• Net profit increased 14% year-on-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 in March 2024.

Outlook and guidance

• On track to achieve aspirational growth and profitability targets for FY25.

• High teens top-line growth and year-on-year EBITDA margin improvement guidance reaffirmed; currently ahead of estimates.

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

• Effective tax rate guided at 24-25% for the year, normalizing after one-offs.

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