ICICI Securities's research report on Zydus Wellness
Zydus Wellness (Zydus)’s Q2FY26 was a strategically important yet transitional quarter – strategic in direction but impacted by muted organic momentum amid GST-led disruption and seasonal weakness. We reckon LFL revenues were flat and its non-seasonal portfolio grew in double digits. Reported revenue growth (+32% YoY) was driven by the Comfort Click acquisition, expanding Zydus’ global wellness footprint and providing an entry into the high-margin Vitamins, Minerals & Supplements (VMS) adjacencies. Profitability was impacted on account of higher overheads due to integration of acquired business and continued investment behind brands. Zydus’ strategy remains sound, and disciplined execution should drive steady, profitable growth through FY26–27E. Maintain BUY.
Outlook
We adjust our earnings estimate for FY26E/FY27E for amortisation of acquisition cost of RiteBite and Comfort Click. We maintain BUY with a DCF-based target price of INR 550. At our target price,
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