Zydus Lifesciences Q3 profit beats estimates; announces share buyback

Zydus Lifesciences has surpassed analyst expectations with its robust performance in the third quarter, driven by strong sales both domestically and overseas.

The company reported a consolidated net profit of Rs 790 crore for the three months ending December 31, marking 27 per cent increase compared to the same period last year. This figure exceeded analysts' average estimate of Rs 683 crore, according to data from LSEG.

Zydus Lifesciences has also announced the approval of a shares buyback programme worth Rs 600 crore via tender offer route. The buyback will be conducted at a price of Rs 1,005 per share, representing a 25 per cent premium to the company's Thursday’s closing price.

The company's total revenue from operations rose 6 per cent to Rs 4,505 crore. The growth was primarily driven by a 16 per cent rise in the India formulations business and 30 per cent jump in the European and emerging markets segment, which includes Mexico and African markets.

However, Zydus Lifesciences saw a decline of 4.3 per cent in its US formulations business compared to the previous year. The trend reflects the ongoing challenges faced by Indian generic drugmakers in navigating pricing pressures and market dynamics in the US market.

Zydus Lifesciences, like its counterparts Cipla and Dr. Reddy's, is recovering from the impact of price erosion in the US market, where it competes in selling generic versions of popular drugs such as Bristol-Myers Squibb's Revlimid.

With India and the US accounting for nearly 85 per cent of its total revenue, Zydus Lifesciences remains focused on leveraging its strengths in both markets to drive sustained growth and profitability.

Zydus Lifesciences shares traded 0.95 per cent lower at Rs 794 after earnings announcement.

(With Reuters inputs)