Post the acquisition, Zydus Wellness’s revenue will cross Rs 50 billion in FY27 (earlier than management target of in three-four years). Further, the acquisition catapults the company into >Rs 50 bn revenue (a milestone few Indian FMCG companies have crossed) and in a league of a select few that focus primarily on health and wellness globally. The company can look to crossselling its products and synergies in the near- to medium-term.
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Anand Rathi Report
Zydus Wellness Ltd.’s acquisition of UK-based Comfort Click broadens its footprint across the UK, EU and USA. The transaction positions it to scale up its wellness range globally, a strategic step toward building a diversified, consumer-focused beauty, health and wellness portfolio.
We like the fact that incentives of Comfort Click’s management team will be aligned with Zydus shareholders as it will continue to lead operations, with part of their proceeds re-invested in growth shares and tied to performance incentive.
We the expect deal to be 1%/20% FY26/27e EPS accretive for Zydus while we introduce FY28e and expect further upside to our revenue/margin estimates for the acquired entity.
We retain a Buy with a higher 12-month Rs 2,995 target price, 30x Sep’27e EPS (Rs 2,570 earlier, 33 times FY27e EPS) as the acquisition catapults the company into the >Rs 50 billion revenue orbit with a focussed play on health and wellness, which barely a few global companies can boast of.
Key risks:
Failed product launches/acquisitions, price-based competition and rise in forex volatility, geopolitical factors affecting the international business.
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