Buy Zydus Wellness; target of Rs 1780: Sharekhan

Sharekhan is bullish on Zydus Wellness has recommended buy rating on the stock with a target price of Rs 1780 in its research report dated July 31, 2020.

Broker Research

August 04, 2020 / 07:53 IST

Sharekhan's research repor on Zydus Wellness

Zydus Wellness (ZWL) Q1FY2021 performance was better than our and street's expectation on the back of strong recovery in the performance of Sugar Free and Complan brands. Also, the performance is better considering the discretionary nature of portfolio. Revenue and PAT decreased by 13.4% and 14.6% respectively (OPM decreased by 121 bps to 22.8%).. Strong recovery in Sugar Free and expected improvement in the sales of Complan due to the new launches and introduction of small packs would help drive better performance in the coming quarters. Lower input prices will drive margins in the coming quarters. We have raised our earnings estimates for FY2021 and FY2022 to factor in better than expected performance.

Outlook

We maintain our Buy recommendation with a revised price target of Rs. 1,780. For all recommendations report, click here

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