ZYDUSLIFE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.5

Zydus Lifesciences (ZYDUSLIFE) offers a solid investment case built on consistent profitability, impressive capital efficiency, and a strong presence in both domestic and global pharma segments. While the PEG ratio signals caution on growth expectations vs. valuation, the fundamentals remain attractive for long-term holding.

🧾 Core Financial Analysis

Return Ratios

ROCE: 24.3%, ROE: 21.2% — robust capital efficiency; top-tier performance in pharma

EPS: ₹45.0 — solid earnings; strong bottom line

Profit Trends

Quarterly PAT: ₹1,255 Cr ↑ from ₹1,024 Cr — continued profit growth

Profit Variation: +6.44% — moderate but stable YoY rise

Balance Sheet Position

Debt-to-Equity: 0.13 — minimal debt; clean financial structure

Dividend Yield: 1.11% — modest payout, supporting reinvestment and investor income

Book Value: ₹238 vs CMP ₹995 — valuation premium justified by financial strength

📊 Valuation Metrics

Metric Value Commentary

P/E Ratio 21.6 Attractive vs industry average (34.0); undervalued

P/B Ratio ~4.18 Reasonable for high ROE stocks

PEG Ratio 11.4 High — implies stock may be priced ahead of growth curve

The high PEG ratio tempers expectations for aggressive upside, but current valuation isn’t excessive given Zydus’s earnings base.

🧪 Business Model & Competitive Advantage

Segment Focus: Generics, biologics, injectables, vaccines (e.g., ZyCoV-D)

Strengths

Broad therapeutic portfolio with export reach

R&D-driven product pipeline

Global regulatory accreditations and manufacturing scale

Moat

Cost-efficient production, IP portfolio, and large domestic distribution network

📉 Technical Overview

RSI: 61.5 — mildly overbought; momentum strong but nearing caution zone

MACD: 3.74 — bullish crossover supports continuation of uptrend

DMA Alignment

CMP above both 50-DMA (₹961) and 200-DMA (₹950) — confirms uptrend

52W Index: 37.8% — mid-range; significant upside potential remains

🎯 Entry Strategy & Investment Guidance

Suggested Entry: ₹965–₹985 — slight dip below CMP, near 50-DMA

Outlook (12–18 months)

Target: ₹1,200–₹1,300 if current growth trajectory sustains

Investor Profile

Strong fit for long-term growth investors in pharma

Suitable for moderate-risk portfolios seeking defensive plays with upside potential

Keep watch on R&D progress, regulatory updates, and new product launches

If you'd like a side-by-side view comparing Zydus with peers like Cipla, Dr. Reddy’s, or Sun Pharma on ROE, valuation, and pipeline momentum — I can roll that out too. Just say the word 🧬💊📊.

Edit in a page