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Indian drugmaker Zydus Lifesciences reported a bigger-than-expected first-quarter profit on Friday, driven by strong demand for its generic respiratory drugs in its key market of North America.

The company's consolidated net profit jumped nearly 31% year-on-year to 14.2 billion rupees ($169.2 million) in the quarter ended June 30, beat analysts' average estimate of 12.34 billion rupees, per LSEG data.

KEY CONTEXT

Indian generic drugmakers earn a major chunk of their revenue from the U.S., the world's largest pharmaceutical market. Zydus Life's larger rivals Cipla and Dr Reddy's beat profit estimates on strong demand in the country.

Alembic Pharma's profit for the quarter also rose, led by strong U.S. sales.

However, these drugmakers have been grappling with price erosion in the market amid stiff competition.

PEER COMPARISON

Valuation Estimates (next 12 Analysts' sentiment

(next 12 months)

months)

RIC PE EV/EBI Revenue Profit Mean # of Stock to Div

TDA growth (%) growth rating* analysts price yield

(%) target** (%)

Zydus Lifesciences 29.02 20.83 10.83 10.99 Hold 26 1.25 0.23

Alembic 31.07 19.40 11.48 16.92 Hold 10 1.29 0.91

Pharmaceuticals

Cipla 25.25 15.73 8.88 9.88 Hold 31 0.95 0.86

Dr Reddy's 19.61 12.33 10.36 3.34 Hold 33 1.04 0.59

Laboratories

* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.9200 Indian rupees