Subscribe to PRO at just Rs.33 per month. Use code SUPERPRO
Last Updated : Feb 09, 2017 11:55 AM IST | Source: Moneycontrol.com

Hold Zydus Wellness; target of Rs 840: Axis Direct

Axis Direct recommended hold rating on Zydus Wellness with a target price of Rs 840 in its research report dated February 03, 2017.

  • bselive
  • nselive
Todays L/H

Axis Direct's research report on Zydus Wellness

Q3FY17 net sales (net of excise) at Rs 1.03 bn were flat YoY – in line with our estimate and once again range-bound in quarterly run-rate of Rs 950-1,100 mn. Despite meaningful investments for category adoption (20% of sales on advertising/distribution over past 10 quarters), the wellness market has not taken off yet in India though we continue to believe that the opportunity size is immense.

The management attributed subdued sales in Q3 to demonetization, felt more severely in the wholesale channel. Gross margin declined 300 bps YoY on higher raw material prices (palm oil). EBITDA margin declined by 150 bps YoY at the cost of lower ad spend (-350 bps). Reported PAT at Rs 251 mn, lower 8% YoY. Our estimates remain unchanged. Maintain HOLD and TP at Rs 840 (25x FY18 EPS).

For all recommendations, click here

The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Feb 9, 2017 11:55 am