Analysts at ICICI Securities and Motilal Oswal Investment Services noted that Zydus Lifesciences' Q3FY23 results beat their estimates.
The Zydus Lifesciences Analyst: Rohan John for ICICI Securities upgraded the stock's rating from ‘hold' to ‘buy' and revised the target price to ₹482 from ₹448.
Analysts at Motilal Oswal Investment Services led by Tushar Manudhane maintained their ‘neutral' rating with a price target of ₹460.
The Zydus Lifesciences Thesis: Analysts at ICICI Securities noted that the company's around ₹4362 crore operating revenue in Q3 — a 20% year-over-increase — beat their estimate of around ₹4,000 crore.
Motilal Oswal Investment Services also noted that the company posted better-than-expected earnings this quarter led by "superior execution in the U.S. segments." The company's U.S. sales grew around 28% YoY this quarter to ₹1,700 crore, it noted.
However, ICICI Securities warned that competition in the U.S. and regulatory hurdles can hamper the growth.
The pharmaceutical company’s net profit was up 25% YoY to ₹622.9 crore. It reported an EBITDA of ₹956 crore and the EBTIDA margin was up 130 basis points to 21.9%. ICICI Securities expect margins to remain stable at 21% going forward.
Analysts at Motilal Oswal Financial Services also expect the company to continue growth but said that the "current valuation adequately factors in the earnings upside," as they retained their ‘neutral' rating for the stock.
Price Action: Shares of Zydus Lifesciences zoomed over 8.5% to hit a 52-week high of ₹476.35 on Monday.
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