Moneycontrol
Get App
Last Updated : Dec 10, 2018 05:24 PM IST | Source: Moneycontrol.com

Buy Zydus Wellness; target of Rs 1472: Sharekhan

Sharekhan is bullish on Zydus Wellness has recommended buy rating on the stock with a target price of Rs 1472 in its research report dated December 07, 2018.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Sharekhan's research report on Zydus Wellness


Zydus Wellness (Zydus) decides to raise Rs. 4,075 crore through a mix of equity and debt in the ratio of 1.7:1. Preferential allotment of 1.86 crore shares at Rs. 1,382 per share will result in equity dilution of ~5%. The money is raised to fund the acquisition of Heinz India business for ~Rs. 4,600 crore. Fund raising through a mix of debt and equity would result in earnings dilution of 3% and 6% for FY2019E and FY2020E, respectively, which is much lesser than earlier anticipated by us. We expect FY2021 will be operationally much better at the consolidated level.


Outlook


With receding risk of high earnings dilution and acquired brands making Zydus a commendable player in the health and wellness space, we upgrade our rating on the stock from Hold to Buy with a revised PT of Rs. 1,472. The stock has corrected by about10% since the announcement of acquisition and, hence, downside risk is minimal.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Dec 10, 2018 05:24 pm
More From
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant