Zydus Wellness Q4 Results Review - Market Share Loss In Malted Food Category A Drag On Volumes: ICICI Direct

ICICI Direct Report

Zydus Wellness Ltd. saw sales growth of 11.4% led by 7.8% pricing growth.

Volume growth was 3.5% in Q4; FY23 volume growth was 4.8%. Ebitda was at Rs 144.6 crore, up 2.2% YoY, with margins at 20.3%.

Zydus Wellness' consequent adjusted profit after tax was at Rs 145.3 crore.

Key triggers for future price performance:

• With the softening of crude, aspartame, palm oil prices and price hikes taken in last one-year, gross margins to inch up to 280 basis points in the next two years. However, milk prices continue to remain elevated.

• Though Zydus Wellness is gaining market share in prickly heat powder and glucose powder category, it is losing market share in MFD (Complan) category, which is a drag on growth • Zydus would be expanding overall distribution network to 3 million retail outlets. Distribution expansion along with innovation is key for successful execution

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