Zydus Lifesciences Q2 FY27 Results Analysis: Revenue Surges 29%, PAT Slips 27% (ZYDUSLIFE)
Zydus Lifesciences Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 7,909.60 Cr (+29.17% YoY) and PAT growth of -26.60% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 04, 2026 |
|---|---|
| Revenue (Q2) | Rs. 7,909.60 Cr (+29.17% YoY) |
| PAT (Q2) | Rs. 925.50 Cr (-26.60% YoY) |
| EBITDA margin | 24.32% (-813 bps YoY) |
| EPS (Q2) | Rs. 9.28 (-25.90% YoY) |
Quarter Snapshot
Revenue grew 29.17% YoY to Rs.7,909.6 Cr, running above the high-teens FY27 guide, but PAT fell 26.6% to Rs.925.5 Cr as D&A doubled, finance costs rose 84.6%, and the FX gain shrank by Rs.277.5 Cr. EBITDA margin of 24.32% met the '>24%' guidance with zero cushion, while net debt rose to Rs.8,033.7 Cr (~1.04x computed proxy). H1 cash conversion was strong at 1.68x PAT, and the SBL API acquisition consolidates from Q3.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| India formulations ahead on accelerating IPM | "a 12%-growth market is a supportive backdrop" | Not observable — no India split in filing | Not observable |
| North America behind YoY | "behind YoY, with the acquisition cushioning the lap" | Not observable — no NA split in filing | Not observable |
| Margins compressing YoY | "likely compressing YoY" | EBITDA margin 24.32% vs 32.45% (−813 bps); flat QoQ | Played out |
| Freight/opex sticky | "elevated freight keeps that line sticky" | Other expenses +46.94% YoY, +4.09% QoQ | Played out |
| FX pattern matters | "recent pattern is reported FX losses… the mark-to-market direction of that line matters" | Net FX gain Rs.136.6 Cr vs Rs.414.1 Cr gain year-ago — gain persisted, smaller | Partially |
| Baddi warning letter status | "the key unknown for the US supply book" | No update in the filing — remains open for the call | Not addressed in the filing |
| Moraiya 5 observations | "CAPA response timeline" | No update in the filing (post-quarter event) — remains open for the call | Not addressed in the filing |
Read our full results preview.
Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| EBITDA margin "in excess of 24%" FY27 | Q1 FY27 call: "24% guidance. So that is what we are sticking to." | 24.32% Q2 / 24.31% H1 (P&L-derived basis; company-basis Q1 print 24.1%) — met, with zero cushion | On Track |
| Consolidated revenue "high-teens" growth FY27 | Q4 FY26 call; reiterated at AGM (Sep 2026) | +25.44% H1, +29.17% Q2 — running above guide | On Track |
| Depreciation ~Rs.550 Cr/qtr (Mirabegron charge-off to Sep 2027) | Q1 FY27 call | Rs.604.5 Cr this quarter | Above guided run-rate |
| Net debt/EBITDA ≤1x (2x temporary post-deal) | Management commentary ("comfortably within the benchmark levels") | ~1.04x on my computed proxy (0.7x company print at Jun 30) | Stretch |
| Capex Rs.1,500–1,600 Cr FY27 | Q1 FY27 call | Rs.1,261.2 Cr in H1 | On Track |
Key Investment Insights
Key Positives
- Consolidated revenue grew 29.17% YoY to Rs.7,909.6 Cr; H1 revenue up 25.44% YoY
- EBITDA margin of 24.32% met management's '>24%' FY27 guidance; margin flat QoQ (+1 bp)
- Pharmaceuticals segment revenue grew 23.25% YoY to Rs.6,558.2 Cr
- Consumer products swung to 0.63% segment margin from −2.65% a year ago
- H1 CFO of Rs.3,162.3 Cr was 1.68x H1 PAT, aided by Rs.1,456.3 Cr receivables release
- FCF of ~Rs.1,901.1 Cr after Rs.1,261.2 Cr H1 capex
Risk Factors
- PAT fell 26.6% YoY to Rs.925.5 Cr despite 29.17% revenue growth
- EBITDA margin compressed 813 bps YoY to 24.32%, sitting exactly at the '>24%' guidance with no cushion
- D&A rose 101.3% YoY to Rs.604.5 Cr, above the ~Rs.550 Cr/quarter guided run-rate
- Finance costs rose 84.6% YoY to Rs.187.0 Cr on acquisition debt; net debt rose to Rs.8,033.7 Cr (~1.04x computed proxy vs ≤1x policy)
- Medical technologies segment loss deepened to −41.12% margin from −22.52% a year ago
- Net FX gain of Rs.136.6 Cr was Rs.277.5 Cr smaller than the year-ago Rs.414.1 Cr gain
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.