ZYDUSLIFE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.5

📊 Core Financials Overview

Profitability

ROCE: 30.6% and ROE: 31.2% — outstanding, reflecting superior capital efficiency and shareholder returns.

EPS: ₹44.3, though PAT dropped sharply from ₹2,814 Cr. to ₹385 Cr. — a 77.4% decline, likely due to one-off gains in the previous quarter.

Debt-to-equity: 0.39 — moderate, well-managed for a capital-intensive pharma business.

Dividend Yield: 1.05% — modest, offering passive income while retaining growth capital.

Institutional Sentiment

FII holding declined (-0.18%), while DII increased (+0.14%) — mixed sentiment, but domestic investors remain constructive.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 23.6 Attractive vs. industry average (33.4) — suggests undervaluation.

P/B Ratio ~4.97 Reasonable for a high-margin pharma firm.

PEG Ratio 0.32 Very attractive — valuation well-supported by growth.

Intrinsic Value ~₹1,080–₹1,120 (est.) Current price of ₹1,048 is slightly undervalued.

🧠 Business Model & Competitive Edge

Core Operations: Zydus Lifesciences Ltd. is a leading pharmaceutical company with a diversified portfolio across generics, specialty drugs, vaccines, and biosimilars.

Strengths

Strong R&D pipeline and global regulatory approvals.

Presence in over 50 countries with robust export revenues.

Strategic focus on specialty therapies and biologics.

Challenges

Volatile quarterly earnings due to patent cycles and regulatory shifts.

RSI at 67.0 — nearing overbought territory, MACD at 17.1 — bullish momentum.

📈 Entry Zone & Technicals

DMA 50: ₹994, DMA 200: ₹964 — price is above both, indicating bullish trend.

RSI: 67.0 — approaching overbought.

MACD: 17.1 — strong bullish crossover.

📌 Entry Zone: ₹1,000–₹1,030 — ideal for accumulation on dips.

🕰️ Long-Term Holding Guidance

2025 Target: ₹926–₹1,138

2026 Target: ₹1,138–₹1,213

2030 Target: ₹1,500+

Holding Strategy: Zydus is a high-quality pharma play with strong fundamentals, global reach, and innovation-driven growth. Suitable for long-term investors seeking exposure to healthcare and biotech. Accumulate during technical pullbacks and hold through cycles.

You can explore Zydus Lifesciences’ long-term forecast and valuation for deeper insights

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