Buy Zydus Wellness; target of Rs 2995: Anand Rathi

Anand Rathi's research report on Zydus Wellness

Zydus’ acquisition of UK-based Comfort Click broadens its footprint across the UK, EU and USA. The transaction positions it to scale up its wellness range globally, a strategic step toward building a diversified, consumer-focused beauty, health & wellness portfolio. We like the fact that incentives of Comfort Click’s management team will be aligned with Zydus shareholders as it will continue to lead operations, with part of their proceeds re-invested in growth shares and tied to performance incentive. We the expect deal to be 1%/20% FY26/27e EPS accretive for Zydus while we introduce FY28e and expect further upside to our revenue/margin estimates for the acquired entity.

Outlook

We retain a Buy with a higher 12-mth Rs2,995 TP, 30x Sep’27e EPS (Rs2,570 earlier, 33x FY27e EPS) as the acquisition catapults the company into the >Rs50bn revenue orbit with a focussed play on health & wellness, which barely a few global companies can boast of.

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