Stock jumps 9% after it reports better than expected net profit in Q3

Volumes spurt at Zydus Lifesciences’ counter after the company reported better-than-estimated earnings for the October to December quarter. Its shares gained 9.63 percent to reach an intraday high of ₹ 476.50 apiece. More than 56 lakh shares changed hands by 01:40 PM

The drugmaker reported an increase of 19.85 percent in its revenue from operations at ₹ 4362.3 crores in the October to December quarter of 2022 (Q3FY23), against ₹ 3639.8 crores in the corresponding quarter last year. Its net profit for the latest quarter rose 24.48 percent to ₹ 622.9 crores against ₹ 500.4 crores posted in the corresponding quarter last year.

The shares opened at ₹ 452.00 apiece, up 3.99 percent on Monday against its previous close of ₹ 434.65 apiece. Then they rallied to touch a 52-week high of ₹ 476.50. The company’s share price has increased by nearly 31 percent in the past six months.

Zydus’s US business makes up about 46 percent of the sales. It stood at $ 235 million, indicating a growth of 29 percent from last year. India’s business which makes 40 percent of its sales grew 12.5 percent as compared to last year, and its European business grew in low-to-mid-single-digits while the API business, which makes up for 4 percent of overall sales, saw revenue growth of 14 percent year-on-year.

The Ahmedabad-based company was formerly known as Cadila Healthcare Limited. It is an Indian multinational pharmaceutical company that is primarily engaged in the manufacturing of generic drugs.

Zydus Lifesciences (NS: ZYDU ) has a market capitalization of ₹ 43, 995 crores and is a large-cap company. It has a return on equity of 14.95 percent and an ideal debt-to-equity ratio of 0.15. Its shares were trading at a price-to-equity ratio (P/E) of 21.47, which is lower than the industry P/E of 30.05, indicating that the stock might be undervalued as compared to its peers.

Written by Simran Bafna

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