Zydus bets big on vaccines and medtech

Mumbai: Zydus Lifesciences Ltd is looking to ramp up its vaccines and medtech portfolio over the next few years, the company’s top executive told investors during an earnings call Tuesday evening.

The drugmaker, which announced its Q4FY25 results the same day, expects double-digit revenue growth in FY26, led by strong performance in both domestic and international markets, as well as newer businesses such as biologics, vaccines, and medtech.

“…led by strong growths in India and international markets and also our new growth themes like biologics, vaccines and all scaling up,” managing director Sharvil Patel told investors.

The company expects to outperform the Indian pharmaceutical market in FY26, while projecting single-digit growth in the US. The management has guided for an Ebitda margin of about 26% in FY26.

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Zydus closed FY25 with its highest-ever operating profit and margins. Consolidated revenue rose 19% year-on-year to ₹23,241.5 crore, with an Ebitda margin of 30.4%.

Vaccines push

Patel said he is “quite upbeat and positive on the overall trajectory for the business and the opportunity” in vaccines.

In FY25, Zydus began development of the world’s first combination vaccine for shigellosis (bacillary dysentery) and typhoid, with support from the Gates Foundation. “We shall conduct early stage development, animal immunogenicity studies and the regulatory preclinical tox studies for this combination vaccine,” he said.

The company also received regulatory approval to begin phase 2 clinical trials for its bivalent TCV vaccine in the March quarter.

“…with potential access now to both India’s public [market] and the WHO pre-qualified public markets we are seeing a good trajectory for the vaccines in terms of scaling it up,” he said.

Zydus’ vaccine strategy spans three core areas, according to Patel. In India, the business is performing well, and the company expects to be a significant contender in upcoming public tenders.

“We believe that we are a critical contender in the public tenders for the MR (Measles Rubella) vaccine that has come out, and we believe that will be an important MR tender supply for Zydus in the coming year,” he said.

It is also seeing demand from multilateral agencies. “…we will be able to participate in some of these tenders. So that could offer additional opportunities in the coming years,” Patel said, referring to UNICEF and the Pan American Health Organisation (PAHO).

The company plans to register some of its products in markets such as Egypt, which could open up further opportunities.

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“Our non-tender sales are doing very well. We are selling, I think, the highest doses of the flu vaccines now. We are selling out all capacities on our rabies vaccine. We have the other two vaccines that are coming up and the new vaccines that are getting added to the portfolio,” Patel said.

Medtech foray

Zydus entered the medtech space last fiscal with the acquisition of a majority stake in French orthopaedic company Amplitude Surgical SA. The company is also developing capabilities in nephrology and cardiovascular devices organically.

“Medical devices is an important area for the organization and we have had important both organic as well as inorganic opportunities that we have looked at and have been successful at,” Patel said.

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“Some of these are already revenue generating and profit making businesses. So, we will look to add more geographies, bring down cost and increase and grow this business,” he added. “It is not going to be short term…the scale up we’ll really get to see after three years.”

US business

Zydus is forecasting high single-digit growth in the US market in FY26, though it faces pressure from tapering sales of its Revlimid generic and a decline in market share for its Asacol HD generic.

The company has a pipeline of 14-15 critical launches lined up for FY27, and believes its base business in the US–now over $1 billion in revenue–remains strong.

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Addressing concerns over potential import tariffs in the US, Patel said the company is evaluating opportunities for local manufacturing. “But any of these decisions will require a lot of time for setting up, so it’s not something that can happen in the short term,” he said. “We have committed to making a good amount of investments in the US with our foray into specialty and other areas.”