 "Zydus Lifesciences stock rallies 5%; hits record high on robust Q4 results")
Shares of Zydus Lifesciences (formerly known as Cadila Healthcare) hit a record high of Rs 1,104.45, as they locked in 5 per cent upper circuit on the BSE in Saturday’s special trading session after the company reported nearly 300 per cent year-on-year (YoY) growth in net profit at Rs 1,182 crore in March quarter (Q4FY24). Shares of Zydus Lifesciences had posted profit of Rs 296.6 crore in Q4FY23. In past seven months, the stock zoomed 89 per cent.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) of Shares of Zydus Lifesciences jumped 30 per cent YoY at Rs 1,630.5 crore in the recently concluded quarter. EBITDA margin for the quarter of Shares of Zydus Lifesciences stood at 29.5 per cent, an improvement of 440 bps on a YoY basis. Revenue from operations grew 10 per cent YoY at Rs 5,533.8 crore.
India branded formulations business grew faster than the market driven by portfolio of key pillar brands and innovation products. In Consumer Wellness space, growth momentum in personal care segment of Shares of Zydus Lifesciences continued, while food and nutrition segment witnessed recovery, the company said.
Zydus Lifesciences' management said it's focus on patient centricity, operational efficiency, strategic investments, and execution of diversified product portfolio continues to pay off, resulting in a significant improvement in profitability as well. The management aspires to sustain strong performance in fiscal year 2024-25 with strong revenue growth and strive to improve EBITDA margins further from FY24 levels.
Due to healthy product mix, analysts expect EBITDA margins to expand around 100 bps every year to ~30 per cent by FY26E. Shares of Zydus Lifesciences has a healthy balance sheet (Rs 3,000 crore above in cash), which would aid in M&A activity and a clean compliance track record will help garner any short-term opportunities in the US, they said.