(Reuters) – India’s Zydus Lifesciences reported third-quarter profit above analysts’ expectations on Wednesday, driven by strong demand for its generic drugs in its key U.S. market.
The drugmaker’s consolidated net profit jumped 30% to 10.24 billion rupees ($117.4 million) in the quarter ended Dec. 31, beating analysts’ average estimate of 8.85 billion rupees, as per data compiled by LSEG.
Revenue from operations climbed 17% to 52.69 billion rupees, led by a 31% jump in the company’s top market – the United States. However, growth in India slowed to 6.7% from 16% last year.
The United States is the company’s biggest market accounting for 47% of total revenue, followed by India.
Shares of Zydus Life were trading 1.3% lower after results.
KEY CONTEXT
New product launches helped Zydus Life increase its revenue from the United States at a time when stiff competition has weighed on the margins of Indian generic drugmakers, which earn a major chunk of their revenues from the region.
Among Zydus Life’s rivals, Sun Pharma and Cipla beat third-quarter profit estimates, while Dr Reddy’s missed expectations. However, all three saw muted growth in their key North American market.
PEER COMPARISON
Estimates (next Analysts’ sentiment
12 months)
RIC PE EV/EBI Revenue Profit Mean # of Stock to Div
TDA growth growth rating* analysts price yield
(%) (%) target** (%)
Zydus Lifesciences 21.30 14.39 7.71 4.01 Hold 28 0.89 0.31
Ltd
Alembic 22.37 14.26 10.96 25.45 Buy 9 0.78 1.25
Pharmaceuticals Ltd
Cipla Ltd 23.09 14.56 8.21 5.85 Buy 33 0.89 0.90
Dr Reddy’s 17.41 10.91 10.11 6.24 Hold 35 0.91 0.66
Laboratories Ltd
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.2375 Indian rupees
(Reporting by Kashish Tandon in Bengaluru; Editing by Subhranshu Sahu)
