Zydus Lifesciences Limited (ZYDUSLIFE) reported a strong financial performance for the fiscal year ended March 31, 2025, and the fourth quarter of FY25, exceeding profitability expectations.

• FY25 Full Year Performance:

  • Consolidated revenues reached ₹232.4 billion, marking a 19% year-on-year (YoY) growth.
  • The company achieved its highest-ever operating profit and margins, with an operating margin of 30.4%, an improvement of 290 basis points over the previous year.
  • Consolidated EBITDA grew by 31% to ₹70.6 billion.
  • Net profit, adjusted for exceptional items, was ₹47.5 billion, up 22%.
  • The balance sheet strengthened with a net cash position of ₹48.8 billion as of March 31, 2025, compared to ₹8.6 billion as of March 31, 2024.

• Q4 FY25 Performance:

  • Consolidated revenues stood at ₹65.3 billion, up 18% YoY and 24% quarter-on-quarter (QoQ).
  • Operating profitability improved, with an EBITDA margin of 32.6% (up 310 basis points YoY and 630 basis points QoQ).
  • EBITDA for the quarter was ₹21.3 billion, growing 30% YoY and 53% sequentially.
  • Adjusted net profit was ₹13.9 billion, up 18% YoY and 36% sequentially.

• Business Segment Highlights (Q4 FY25):

  • US Business: Registered revenues of ₹31.3 billion, up 24% YoY and 30% QoQ. The company filed 3 ANDAs, received 6 approvals, and launched 5 new products. The quarter-on-quarter increase was driven by the base portfolio, Mirabegron sales, and other scaling launches, with no significant Revlimid contribution in Q4 FY25.
  • India Geography (Formulations & Consumer Wellness): Accounted for 39% of total revenues, growing 13% YoY.
    • Branded Formulation business grew 11% YoY, outpacing market growth. The chronic portfolio increased to 43% as per IQVIA MAT March 2025.
    • Consumer Wellness business recorded revenues of ₹9.1 billion, up 17% YoY with 13% volume growth, driven by strong performance in personal care (Nycil, Ever Yuth) and food & nutrition segments (aided by Naturell India acquisition).
  • International Markets: Delivered robust growth with revenues of ₹5.5 billion, up 12% YoY.

• Management Outlook and Key Initiatives:

  • Overall Performance: Dr. Sharvil Patel, Managing Director, expressed satisfaction with the strong double-digit growth and highest-ever operating profitability in FY25, attributing it to the "going beyond the pill" strategy and strong execution.
  • US Business Outlook: The company expects single-digit growth for the US business in FY26. While FY25 was likely the peak for Revlimid sales due to pricing and competition challenges, the base business is strong and is expected to sustain easily over $1 billion in revenue without exceptional products. Significant product launches are planned for FY27, with 14 to 15 critical launches.
  • Mirabegron Litigation: Zydus continues to supply Mirabegron in the US market, with the next trial scheduled for February 2026. The company believes the risk-reward profile has not changed.
  • Sitagliptin Franchise: Performing better than initial estimates and is expected to be an important product for FY26, supported by a 5-year national contract.
  • FY26 Margin Guidance: The company anticipates EBITDA margins to comfortably exceed or be around 26% for FY26, factoring in Revlimid competition, loss of Asacol, and higher R&D expenses (expected to be around 8% of overall basis).
  • Innovation Pipeline:
    • NCE: Received USFDA approval for Phase II(b) clinical trial of Usnoflast (novel oral NLRP3 inflammasome inhibitor) for ALS, also granted 'orphan drug' designation.
    • Saroglitazar Magnesium: Data monitoring is ongoing for Phase II(b)/III clinical trials for PBC and Phase II(b) for MASH. Phase II(b)/III trial read-out for PBC is expected towards the end of the calendar year, and the company plans to commercialize it independently if data is positive.
    • Vaccines R&D: Initiated development of the world’s first combination vaccine against shigellosis and typhoid with support from the Gates Foundation. Received approval to initiate Phase 2 clinical trial for Bivalent TCV vaccine. Expects scale-up in FY26, with potential participation in India public tenders (MR vaccine) and global tenders (UNICEF, PAHO).
    • Specialty Business: Entered an exclusive development, licensing, supply, and commercialization agreement with Synthon BV for a novel 505(b)(2) oncology product, with NDA likely to be filed in 2026.
  • Medtech Foray: Entered into a share purchase agreement to acquire a majority stake in Amplitude Surgical SA, France, a European Medtech leader in lower limb orthopaedic technologies.
  • Regulatory: Ambernath API manufacturing facility received an EIR with no action indicated status from the US FDA following a February 2025 inspection.