ZYDUSWELL - Zydus Wellness

📊 NSE: ZYDUSWELL 🏢 Food - Processing - Indian 📅 Last Updated: 12/14/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue reached INR 1,766.8 Cr in FY20, a 109.7% increase from INR 842.3 Cr in FY19, reflecting the first full year of the Heinz acquisition. Revenue is expected to marginally de-grow in FY21 due to COVID-19 lockdowns but grow by 10-12% over the medium term. E-commerce channels for Complan are seeing growth rates of 15-20%.

Geographic Revenue Split

The company is expanding its international footprint, specifically building presence in Europe and the U.S. through the Comfort Click acquisition. Domestic revenue is heavily concentrated in India, with a direct reach of 6.2 lakh outlets and a total availability of 2.9 million outlets.

Profitability Margins

Operating margins stood at 18.2% in FY20, down from 20.7% in FY19 due to higher agro-commodity prices and one-time acquisition costs. Adjusted PAT margin was -17.1% in FY20 (INR -302 Cr) after accounting for brand/goodwill amortization over 10 years, compared to 11.8% (INR 99 Cr) in FY19.

EBITDA Margin

Operating margin is expected to sustain at 18-19% over the medium term. EBITDA interest coverage was 2.33 times in FY20, down from 6.47 times in FY19. Debt to EBITDA is projected to improve to less than 2 times in FY21 from 4.7 times in FY20.

Capital Expenditure

The company undertook a massive acquisition of Heinz for INR 4,700 Cr. Recent equity infusions of INR 1,000 Cr (INR 350 Cr from Zydus Family Trust and INR 650 Cr via QIP) are being utilized for debt reduction.

Credit Rating & Borrowing

CRISIL AA+/Stable (Reaffirmed as of October 2020). Borrowing costs are being optimized by refinancing INR 500 Cr of NCDs and reducing total debt by INR 1,000 Cr to improve gearing to 0.14x.

⚙️ Operational Drivers

Raw Materials

Agro-commodities including milk, sugar, and other food ingredients represent the primary cost base. Specific percentage of total cost for each is not disclosed, but price hikes in these commodities reduced margins by approximately 250 basis points in FY20.

Import Sources

Primarily sourced from domestic Indian markets for legacy brands; international sourcing for Comfort Click operations in Europe.

Capacity Expansion

Focus is on distribution expansion rather than just manufacturing capacity; aiming to increase direct reach from 6.2 lakh outlets to 3.5 million outlets in the coming quarters.

Raw Material Costs

Raw material costs are subject to agro-commodity price volatility. The company uses its scale post-Heinz acquisition to drive procurement synergies with the Zydus Cadila group.

Manufacturing Efficiency

Synergies with Zydus Cadila pharma distribution channels are expected to improve blended operating efficiency.

Logistics & Distribution

Direct distribution reach of 6.2 lakh outlets; total availability across 2.9 million outlets. Distribution is a key growth lever for the RiteBite and legacy portfolios.

📈 Strategic Growth

Expected Growth Rate

10-12%

Growth Strategy

Growth will be driven by integrating the distribution of acquired brands (Heinz, RiteBite, Comfort Click), expanding direct reach to 3.5 million outlets, and launching new product variants. The company is also leveraging e-commerce (15-20% growth in Complan) and international expansion into the US and Europe.

Products & Services

Health food drinks, energy drinks, skin care powders, sugar substitutes, spreads, and protein bars.

Brand Portfolio

Sugar Free, Everyuth, Nutralite, Glucon D, Complan, Nycil, Sampriti Ghee, RiteBite Max Protein, WeightWorld, maxmedix, animigo.

New Products/Services

Expansion of the RiteBite Max Protein range and off-season variants for seasonal brands to balance the 70:30 revenue skew.

Market Expansion

Targeting 3.5 million total outlets in India and expanding the Comfort Click model in Europe and the U.S.

Market Share & Ranking

Complan market share is being 'protected' in key segments by focusing on larger, more profitable packs rather than value-eroding sachets.

Strategic Alliances

Strategic importance to parent Cadila Healthcare Ltd, which provides need-based financial support and management control.

🌍 External Factors

Industry Trends

Shift toward 'Low Sugar/No Sugar', 'High Protein', and 'Active Lifestyle' products. The industry is evolving toward functional wellness, and ZWL is positioning itself with brands like Sugar Free and RiteBite.

Competitive Landscape

Intense competition in the HFD (Health Food Drink) category from 2-3 major players, restricting pricing power and market share growth for Complan.

Competitive Moat

Strong brand equity in niche categories (Sugar Free, Glucon D) and a massive distribution network of 2.9 million outlets. Sustainability is backed by the Zydus Cadila group's pharma distribution synergy.