Zydus Life saw a 2.9% decline in its share price after UBS reaffirmed its ‘Sell’ rating, setting a target price of ₹850. As of 9:36 AM, the shares were trading 2.80% lower at Rs 874.65.
The rating downgrade comes amid concerns over Zydus Life’s €390 million acquisition of Amplitude Surgical. UBS cited the deal’s high valuation and low return on capital employed (RoCE) as key risk factors. The acquisition carries an EV/EBITDA multiple of 14.5x based on the past year’s earnings, making it an expensive move.
UBS further highlighted that the acquisition is expected to deliver a low RoCE of just 3-4% in the initial years, which could weigh on overall profitability. Additionally, Zydus Life has used its existing cash reserves for the purchase, raising concerns about liquidity in the near term.
Zydus Life shares opened at ₹898.50, reaching a high of ₹898.75 and a low of ₹872.60. The stock remains close to its 52-week low of ₹855.10, while its 52-week high stands at ₹1,324.30.
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