NEW DELHI–Indian pharmaceutical company Zydus Lifesciences reported a 26.6% decline in consolidated net profit for the second quarter of fiscal 2027, as shrinking operating margins offset strong revenue growth across its domestic and international businesses.
The company posted a net profit of Rs 925.5 crore for the July-September quarter, compared with approximately Rs 1,261 crore during the corresponding period last year, according to financial results released Wednesday.
Revenue increased 29% year over year to Rs 7,910 crore, up from Rs 6,123 crore in the second quarter of fiscal 2026.
Despite the substantial increase in sales, operating earnings declined. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 6% to Rs 1,895 crore from Rs 2,015 crore a year earlier.
The company’s EBITDA margin narrowed to 23.95%, compared with 32.9% during the same quarter last year, indicating a significant reduction in operating profitability.
Zydus continued investing in research, development and manufacturing infrastructure during the quarter.
Research and development expenditures totaled Rs 657.3 crore, representing 8.3% of consolidated revenue. The company also reported organic capital expenditures of Rs 465.5 crore.
Its Indian formulations business generated revenue of Rs 1,884 crore, an 18% increase from the previous year. The segment accounted for approximately 24% of consolidated revenue.
Within the domestic business, branded pharmaceutical formulations recorded 19% year-over-year growth.
North America remained a major contributor to the company’s financial performance, with formulations revenue rising 21% year over year to Rs 3,315 crore.
The North American business also recorded 7% sequential growth from the previous quarter, supported by increased sales volumes in its established product portfolio and expansion of its U.S. specialty pharmaceutical operations.
In constant currency terms, North American formulations revenue reached $347 million.
The company’s formulations business in other international markets also recorded strong growth, generating Rs 1,001 crore in revenue, an increase of 33% compared with the corresponding quarter last year.
Meanwhile, the active pharmaceutical ingredients (API) business reported revenue of Rs 149 crore, representing a modest 1% annual increase.
Revenue from the Alliances and Others segment surged 374% to Rs 59.2 crore.
Despite growth across most business segments, investors reacted negatively to the decline in quarterly profitability.
Shares of Zydus Lifesciences fell as much as 4.59% during Wednesday’s trading session, reaching an intraday price of Rs 1,182.05 at approximately 2 p.m.
The stock later recovered some of its losses and was trading at Rs 1,201.55, down approximately 3%, at the time of the report.
According to exchange data, Zydus Lifesciences shares have traded between a 52-week high of Rs 1,266.15 and a low of Rs 835.85.
The quarterly results highlight the contrast between Zydus Lifesciences’ expanding pharmaceutical sales and declining profitability, even as the company continues investing in research and development and growing its international operations. (Source: IANS)
