Buy Zydus Wellness; target of Rs 2304: Sharekhan

Sharekhan's research report on Zydus Wellness

Zydus Wellness Limited’s (ZWL’s) Q1FY26 numbers were soft, with revenues growing by 2% y-o-y, while OPM fell 40 bps y-o-y to 18% and PAT declined by 13% y-o-y. Shorter summers and unseasonal rains hit performance. Excluding seasonal brands, growth was in double digits. We expect ZWL to clock a revenue/PAT CAGR of 12%/20%, respectively, over FY25-27 driven by a focus on margin resilience, tech-enabled efficiencies and sustainable growth through innovation and disciplined expansion.

Outlook

Stock trades at 31x/26x its FY26E/FY27E EPS, respectively. We maintain a Buy with an unchanged PT of Rs. 2,304.