Nomura has retained its buy rating on Zydus Lifesciences with a target price of ₹1,140, implying an upside of nearly 29% from the current market price of ₹884.45. The brokerage acknowledges a Q4 EBITDA miss but remains optimistic about FY26, citing better-than-expected guidance.
The Q4 EBITDA came in below expectations, primarily due to lower contribution from gRevlimid. However, FY26 guidance was stronger than Nomura’s earlier estimates, particularly for the US and India markets.
Zydus expects US revenue to grow in high single digits in FY26F, as opposed to Nomura’s earlier projection of a 2% decline. This revised outlook is attributed to stronger contributions from key products such as Mirabegron, Sitagliptin 505(b)(2), and gRevlimid.
In India, the company expects growth ahead of the broader market, and vaccine sales contribution is also projected to rise in FY26. On the margin front, Zydus has guided for an EBITDA margin of more than 26%, closely aligned with Nomura’s forecast of 26.1%.
Current market price (CMP): ₹884.45
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