Zydus Wellness Limited

Consumer Defensive — Packaged Foods · NSE

₹515.00+₹5.05 (+0.99%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Zydus Wellness Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Zydus Wellness Limited engages in the development, production, marketing, and distribution of health and wellness products in Asia, the Middle East, Africa, the Oceania, Europe, and North America.

IndustryPackaged Foods

SectorConsumer Defensive

Employees1,685

Annual revenue₹3,940 Cr

How does it make money?

Turns over ₹3,940 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 1,685 employees supports ₹2.34 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.34 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 3.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE51.0%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 14.1% and earnings to grow about 29.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.1%

Est. earnings growth+29.0%

Analysts8

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +76% while net margin moved -64% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+76%

Margin effect-64%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 3.4% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

26/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

87.0x

3Y Median

42.1x

40 monthly readings · mean 45.4x · range 30.3x–85.5x

Sector Median

51.7x

median of 4 sector peers

⚠️Current valuation is approximately 107% above its 3y median of 42.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 68% above the peer median of 51.7x.

vs. its own history

Expensive

42.1x median over 40 months · +107%

vs. sector peers

Expensive

51.7x median of 4 peers · +68%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

38.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 167% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 6.0% to 3.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 977% over 3 years, from ₹297 Cr to ₹3,203 Cr.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 31.9x to 3.4x.
🟡Profit is decliningFinancial
Net profit is down 36% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.2 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 15.2% to 12.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 107% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 15% a year✓ 20.7% CAGR
Latest reported year was 66.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 12.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 6.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✓ 3.4x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹125 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹16,385 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

87.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.81x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.92

Profitable

Profitable on a per-share basis

ROE

3.4%

Weak

Weak capital efficiency

ROCE

3.4%

Weak

Low return on total capital employed

Debt/Equity

0.55x

Low

Conservative leverage

Revenue Growth (YoY)

66.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-7.0%

Falling

Profits are shrinking

Dividend Yield

0.23%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹125 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

31.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.9%

Average

Average margins

Net Margin

4.1%

Average

Average bottom-line conversion

Current Ratio

1.88

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.10

Defensive

Steadier than the market

52W Range Position

60%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

509.6 / 520.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,243 Cr	₹2,315 Cr	₹2,691 Cr	₹3,940 Cr	+20.7%
EBITDA	₹340 Cr	₹319 Cr	₹383 Cr	₹509 Cr	+14.4%
EBITDA Margin	15.2%	13.8%	14.2%	12.9%	—
PAT (Net Profit)	₹310 Cr	₹267 Cr	₹347 Cr	₹197 Cr	-14.0%
EPS	₹9.76	₹8.39	₹10.9	₹6.2	-14.0%
ROE	6.1%	5.0%	6.1%	3.4%	—
ROCE	6.0%	5.3%	6.5%	3.4%	—
Total Debt	₹297 Cr	₹329 Cr	₹188 Cr	₹3,203 Cr	+120.9%
Free Cash Flow	₹47 Cr	₹218 Cr	₹314 Cr	₹125 Cr	+38.7%

🟢 Revenue has grown at 20.7% a year over 3 years.

🟢 EBITDA has grown at 14.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 15.2% to 12.9% over 3 years (-2.2 pts).

🔴 PAT (Net Profit) has shrunk at 14.0% a year over 3 years.

🔴 EPS has shrunk at 14.0% a year over 3 years.

🔴 ROE has fallen from 6.1% to 3.4% over 3 years (-2.7 pts).

🔴 ROCE has fallen from 6.0% to 3.4% over 3 years (-2.6 pts).

🔴 Total Debt has grown at 120.9% a year over 3 years.

🟢 Free Cash Flow has grown at 38.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10,308 Cr

Total Liabilities

₹4,482 Cr

Cash & Equivalents

₹111 Cr

Operating Cash Flow

₹226 Cr

Capex

-₹102 Cr

Shareholding (proxy)

Institutional Holding

21.4%

Insider Holding

69.9%

Corporate Actions

Dividend Rate

₹1.2

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

7 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹612.63

+19.0% vs CMP

Target Range

₹570 – ₹665

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

1 positive1 mixed1 negative3 general

Zydus Wellness (ZYDUSWELL) Share/Stock Price Live, NSE

TechGraph, 10 Oct

Compare Zydus Wellness with

Equitymaster, 16 Oct

Zydus Wellness Nine Monthly Results, Nine Monthly Earnings for Zydus Wellness

The Economic Times, 13 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

ZYDUS WELLNESS SHARE PRICE

ICICI Direct, 09 Dec

Should You Buy Zydus Wellness Limited (NSE:ZYDUSWELL) For Its Upcoming Dividend?

Simply Wall Street, 13 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Zydus Wellness Share Price Falls Over 3% After Q1 Net Profit Declines

NDTV Profit, 04 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Growth · Risk

WeakProfitability · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Debt / EBITDA falls below 3x · see Key things to watch ↑