Zydus Lifesciences Limited board of directors has formally reviewed and commented on penalties levied by BSE and NSE for technical non-compliance with board meeting intimation requirements under SEBI regulations.

Penalty Details and Background

Both BSE and NSE imposed penalties of ₹11,800 each (including GST) on the company through notices dated December 15, 2025. The penalties were levied for technical non-compliance with Regulation 29 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The non-compliance related to insufficient prior intimation for a board meeting held on November 6, 2025, which was convened to consider a fund-raising exercise. Under Regulation 29, companies must provide at least two working days' advance notice to exchanges, excluding both the intimation date and meeting date.

Timeline and Compliance Issue

Zydus Lifesciences had provided meeting intimation to both exchanges on November 3, 2025. However, a discrepancy arose regarding the interpretation of working days due to different holiday calendars.

The company considered November 5, 2025, as a working day based on the RBI holiday list for Ahmedabad, where its registered office is located. However, the exchanges treated it as a holiday due to the trading holiday in Mumbai on account of Prakash Gurpurb Sri Guru Nanak Dev.

Board's Response and Analysis

At the board meeting held on February 9, 2026, directors reviewed the notices dated December 15, 2025, and the company's replies dated December 29, 2025. The board made several key observations:

• The technical non-compliance was inadvertent, resulting from different interpretations of holiday calendars between Ahmedabad and Mumbai
• The company acted in good faith with no intention to deviate from regulatory requirements
• Legal counsel's interpretation contributed to the technical error
• The company maintains a robust compliance framework

Penalty Payment and Compliance Measures

The company has paid both penalties within the prescribed timeline as specified in the exchange notices. The board confirmed that replies were submitted to both exchanges on December 29, 2025, acknowledging the penalty payments.

Key compliance actions taken include:

• Payment of ₹11,800 to BSE within prescribed timeline
• Payment of ₹11,800 to NSE within prescribed timeline
• Formal acknowledgment to both exchanges
• Implementation of strengthened processes to prevent future technical non-compliances

Corporate Governance Commitment

The board emphasized that the company has consistently endeavored to comply with applicable rules and regulations in their true letter and spirit. Despite this inadvertent technical error, Zydus Lifesciences has undertaken necessary steps to strengthen its compliance processes.

The board reaffirmed its commitment to strong governance and regulatory adherence, ensuring that such technical discrepancies are avoided in future through enhanced process controls and clearer interpretation guidelines for holiday calendars across different locations.

The Board of Directors of Zydus Lifesciences Limited approved the unaudited financial results for the quarter and nine months ended December 31, 2025, at their meeting held on February 9, 2026. The company subsequently held its Q3FY26 post-results earnings call on February 10, 2026, pursuant to regulations 30 and 46(2)(oa) of the SEBI Listing Regulations.

Board Meeting and Regulatory Compliance

The meeting commenced at 11:10 a.m. and concluded at 1:15 p.m., with results reviewed by the Audit Committee and taken on record by the Board pursuant to Regulation 33 of SEBI Listing Regulations. The financial results were prepared in accordance with Indian Accounting Standards (Ind AS) and underwent limited review by statutory auditors Deloitte Haskins & Sells LLP.

Consolidated Financial Performance Q3FY26

The company demonstrated robust consolidated performance during Q3FY26. Total revenue from operations reached ₹68,645 million, representing significant 30.30% year-over-year growth from ₹52,691 million in Q3FY25. Net profit for the quarter stood at ₹10,421 million compared to ₹10,235 million in the corresponding quarter of the previous year, marking a 1.82% increase. EBITDA for the quarter stood at ₹18.20 billion, up 31% year-on-year with an EBITDA margin of 26.50%.

Business Segment Performance

North America Operations

The North America business, comprising the United States and Canada, registered revenues of ₹28,000 million during the quarter, up 16% year-on-year. The base US business continued to grow driven by sustained volume expansion and new products launched over the last 12 months. The company filed 18 ANDAs, received 8 approvals and launched 4 new products during the quarter. On the US specialty front, the company launched BEIZRAY (albumin-solubilized docetaxel injection), its first oncology 505(b)(2) product.

India Branded Formulations

The India branded formulation business sustained its growth trajectory with a robust 14% year-on-year growth, outperforming the market growth. The growth was driven by persistent traction in innovation products and pillar brands, with the chronic segment continuing to grow at a faster pace. Contribution of chronic portfolio increased to 45.30% as per IQVIA MAT December 2025.

International Markets and Consumer Wellness

International markets formulation business posted revenues of ₹7.90 billion with strong year-on-year growth of 38%. The Consumer Wellness business recorded revenues of ₹9.60 billion, up 113% year-on-year with full quarter consolidation of Comfort Click business.

Strategic Developments and Innovation Pipeline

During the earnings call, Managing Director Dr. Sharvil Patel highlighted key strategic developments. The company plans to file Saroglitazar Magnesium with the USFDA for PBC indication, marking a pivotal milestone for growth in the specialty pharmaceutical space. In January 2026, the company received final approval from the USFDA for Zycubo (copper histidinate), becoming the first and only therapy approved for the treatment of Menkes disease.

The company has licensed two large molecules, Pembrolizumab and Ranibizumab biosimilars, leveraging the recently acquired biologics manufacturing facility in the US. The company expects to launch Ranibizumab in the second half of the year and aims for meaningful Bio CDMO business development over the next 2-3 years.

Exceptional Items and Future Outlook

The quarter's results were affected by exceptional items totaling ₹849 million, primarily attributed to the one-time impact of New Labour Codes implementation. The company expects R&D expenses to remain at 7.50%-8.00% of revenue for FY26, with Q4 EBITDA margins expected to be 23% plus despite minimal Lenalidomide revenue.

Management expressed confidence in continued double-digit growth across key business segments, with the US generics business showing 11% volume growth and international markets expected to maintain 20% plus growth trajectory.

Source: Earnings Call Transcript