Zydus Wellness Ltd., incorporated in the year 1994, is a Mid Cap company (having a market cap of Rs 13521.83 Crore) operating in FMCG sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 607.52 Crore, up 58.17 % from last quarter Total Income of Rs 384.10 Crore and up 24.19 % from last year same quarter Total Income of Rs 489.17 Crore. Company reported net profit after tax of Rs 133.13 Crore in latest quarter.
Investment Rationale
The brokerage increases earnings estimates by ~3% for FY22-23E. It models revenue / EBITDA / PAT CAGR of 11% / 19% / 36% over FY21-23E – net profit likely to grow ahead of revenue and EBITDA driven by deleveraging of balance sheet. It maintains BUY with a DCF-based unchanged target price of Rs2,500. At the target price, the stock will trade at 35x P/E multiple Mar-23E. Key downside risks are delays or failures in new product development or inability to expand distribution.
Promoter/FII Holdings
Promoters held 64.8 per cent stake in the company as of March 31, 2021, while FIIs held 16.6 per cent, DIIs 11.1 per cent and public and others 7.5 per cent.
