Sharekhan's research report on Zydus Wellness
Zydus Wellness Limited’s (Zydus) reported higher-than-expected Q1FY2023 performance. Revenue/adjusted PAT grew by 16.6%/6.8% y-o-y. Volume growth stood at 10.3%. Margins down y-o-y due to sustained input cost inflation. Zydus gained/maintained market share/leadership position in most product categories. Focus is on sustained market share gains in key brands. Summer brands, Glucon D and Nycil, delivered strong double-digit growth after two years of lull. Management is targeting double-digit revenue growth over the next two years, aided by distribution expansion and product innovation.
We maintain Buy with an unchanged PT of Rs. 2,250. The stock trades at 27.7x/20.0x its FY2023E/FY2024E earnings, which is at a discount to some large peers.
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