Sharekhan's research report on Zydus Wellness
Zydus Wellness Limited’s (ZWL’s) Q3FY25 numbers were mixed with revenue growing by 15% y-o-y to Rs. 462 crore (versus Rs. 435 crore expected), while OPM stood flat y-o-y at 3.1% (against expectation of 5.8%). PAT came in at Rs. 6.4 crore. Management has guided for double-digit revenue growth and EBITDA growth to be in line with or higher than revenue growth in FY26. The company aims to achieve 17-18% OPM in the coming years through a mix of gross margin expansion and operating leverage.
Outlook
The stock has corrected by 19% since its recent high and trades at 31x/23x/19x its FY25E/FY26E/FY27E EPS, respectively. We maintain a Buy with a revised PT of Rs. 2,121.
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