Zydus Wellness zooms 10% in trade; Motilal Oswal initiates 'Buy'; check TP

Zydus Wellness shares gained 10.4 per cent on BSE, registering an intra-day high at ₹468.35 per share. At 10:33 AM, Zydus Wellness’ share price was trading 7.8 per cent higher at ₹456.9 per share on BSE. In comparison, the BSE Sensex was up 0.24 per cent at 84,874.45.

 

The company has a total market capitalisation of ₹14,536.76 crore. Its 52-week high was at ₹530.55, and its 52-week low was at ₹298.6. 

 

Motilal Oswal Financial Services has initiated coverage on Zydus Wellness with ‘Buy’ for a target of ₹575, which implies an upside of 25.8 per cent from current levels. 

 

 

The brokerage believes Zydus Wellness offers one of the best risk–reward profiles in the sub-₹15,000-crore fast-moving consumer goods (FMCG) universe, backed by a sharp focus on health and wellness categories and improving growth visibility.

 

Zydus, with revenue of about ₹4,000 crore, has leadership positions across sugar substitutes (Sugar Free), glucose powders (Glucon-D), skincare (Everyuth), functional foods (Nutralite), prickly-heat powder (Nycil) and nutritional beverages (Complan). Recent bolt-on deals — Naturell (RiteBite Max Protein) and UK-based Comfort Click — have further plugged it into fast-growing themes such as high-protein snacking, preventive health and digital-first nutrition.

Riding global health and nutrition megatrends

Motilal Oswal highlights that Zydus’ portfolio is tightly aligned with global consumption shifts towards low/no sugar, high protein, preventive wellness and on-the-go functional nutrition. Unlike many FMCG peers facing saturation in core categories, Zydus still has room to add new users, especially among urban youth and affluent, health-conscious consumers.

 

The company is also leveraging e-commerce, quick commerce and D2C to deepen engagement and premiumisation. Organised channels now contribute about 23 per cent of sales, with e-commerce alone at 10 per cent, and quick commerce accounting for roughly 40 per cent of online business.  CATCH STOCK MARKET LIVE UPDATES TODAY

Aggressive scale-up via M&A

In FY19, with revenue of less than ₹500 crore, Zydus Wellness decided to buy the Heinz portfolio, which was twice its size. It was a challenging decision, as it took several years to stabilize the sizable acquired portfolio amid multiple headwinds such as Covid, seasonality, etc. As a result, historical earnings growth is not inspiring, but it does not reflect the true potential of the company, the brokerage said. 

 

In order to achieve a meaningful scale, Zydus acquired Naturell India (RiteBite, Max Protein) in December 2024 in the fast-growing functional and protein nutrition segment and Comfort Click in September 2025 (Weigh World, maxmedix, Animigo), a UK and European online-first wellness brand, to expand its international footprint.

Distribution shifts from niche to pan-India omnichannel

The report notes that Zydus has moved from being an urban, chemist-heavy franchise to a broad-based omnichannel network. Outlet coverage has expanded from 0.8 million to around 2.8 million by FY24, with direct reach at 0.7 million outlets and a target of 3.5 million outlets over the medium term.

 

The company now operates with 1,950-plus distributors, more than 2,800 field staff and 25 warehouses (including 21 cold-storage units), supporting growth across general trade, modern trade, e-commerce and quick commerce. This stronger backbone is expected to aid both new launches and market share gains across categories.

Margin headroom and earnings acceleration

Zydus has been focusing on faster scalability for its core business and acquired businesses; hence, the company has been in the investment phase. Heinz's portfolio was sizable (2x of core) and required closer attention of brand investment to grow the business. In this tenure, the company had seen multiple headwinds, such as Covid and weak seasonal demand. Thereby, Ebitda margin has seen consistent contraction and reached 14 per cent in FY25 from 18 per cent seen after the Heinz acquisition in 2019 and 24 per cent recorded before the Heinz acquisition, Motilal Oswa noted.

 

Zydus’s portfolio is increasingly well aligned with the structural shifts in global food and nutrition consumption trends. The company has been keeping its portfolio relevant to evolving consumer needs and aligned with modern health and wellness trends. The current distribution backbone is robust and well diversified, supported by 1,950 distributors, a 2,800-strong field force, and 25 warehouses (including 21 cold-storage facilities)

 

The company has been focusing on multiple cost initiatives, such as streamlining the manufacturing setup (five plants to four plants) backed by flexible outsourcing (now 18 third party partners), supply chain efficiency, and distribution leveraging. Besides, a steady shift to premiumisation and operating leverage will drive Ebitda margin expansion for the organic business, according to the brokerage. 

 

“We model the organic Ebitda margin of nearly 16 per cent in FY28, while the company aims to achieve 17 per cent. Thereby, there is an upside risk in our operating margin assumption for the organic business,” the brokerage said.  

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