HSBC Slashes Zydus Lifesciences Target Price Amid Legal Setback and Growth Concerns

Zydus Lifesciences stock saw fresh pressure after HSBC lowered its target price to ₹855 from ₹970, reflecting growing worries over the firm's earnings prospect. This follows a US Federal Court decision that compelled Zydus to pull back its generic alternative of Myrbetriq, a key contributor to revenue, from the US market. The legal blow prompted a steep stock fall, with Zydus trading close to ₹827, down more than 6% in recent times.

 

Analysts point out that the Myrbetriq exit would bite US revenues by $35 million every quarter, while the spectre of financial penalties hangs in the air. HSBC's downgrade is as other brokerages cut targets, attributing high concentration risk in US sales and doubts over new launches. At the same time, Zydus' takeover of Amplitude Surgical is regarded as a long-term bet with modest near-term synergy, diluting earnings in FY26-27.

 

Even with strong Q3 bottomline and US topline growth, the stock has lost more than 20% in six months. Investors are advised to keep a close eye on regulatory and legal updates as Zydus fights this difficult period.

 

Source: CNBC TV18, Groww, Financial Express