1FY23 margins contracted to reflect elevated cost pressures with the gross margins also declining. The topline staged a steady growth y-o-y pointing at an improvement. Overall the results are operationally in line with the estimates. Zydus sees US growth to improve materially in FY2024, driven by expected new launches and ramp-up in the recent launches, while FY23 could witness a slower growth momentum. The India business to outpace the industry’s growth over the medium to long term, backed by market share gains in key therapy areas, new launches, focus on brand building, and growth in the base business.
We retain our Buy recommendation on Zydus Lifesciences with an unchanged PT of Rs. 440.
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