Sharekhan recommended Hold rating on Zydus Wellness with a target price of Rs 1840 in its research report dated September 16, 2019.
Sharekhan's research report on Zydus Wellness
The stock price of Zydus Wellness Limited (Zydus) has moved up by ~17% since our last update (dated July 31, 2019). The current valuation at 31.6x its FY2021 earnings is at a premium of ~7% of its historical five-year average of 30x and does not provide much upside from the current level.
Hence, we downgrade our rating on the stock from Buy to Hold with a revised PT of Rs. 1,840. Post the acquisition of Heinz, working capital has remained stable; however, higher debt has put some pressure on the balance sheet.
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