ICICI Direct's research report on Zydus Wellness
Zydus Wellness (ZWL) is one of the FMCG companies present in the healthcare, nutrition & related products space. The company has six brands i.e. Sugarfree, Complan, Glucon-D, Nycil, Everyuth & Nutralite. It commands a dominant market share in sugar substitute (95%), prickly heat powder (35%) and glucose powder (60%) categories • The company has more than 850 distributors with direct reach of 0.6 million retail outlets. Its high gross margins at ~55% give it leeway to spend ~12- 13% of sales on advertisement to support new products.
Outlook
High inflation in milk is adversely impacting margins. The company has taken addition price hike of 2%, which would help in margins recovery • We maintain our BUY rating on the stock.
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