- Zydus Wellness Q1 net profit fell 7% to Rs 119 crore despite 67% revenue growth
- Revenue rose to Rs 1,437 crore aided by Comfort Click acquisition impact
- EBITDA grew 55%, but margin shrank to 16.8% due to acquisition-related costs
Zydus Wellness Ltd. reported a 7% year-on-year decline in consolidated net profit for the June quarter even as revenue jumped nearly 67%, with the company's acquired Comfort Click business contributing to the expanded operations.
Net profit fell to Rs 119 crore in the first quarter of FY27 from Rs 128 crore a year earlier. Revenue from operations rose 66.9% to Rs 1,437 crore from Rs 861 crore, according to the company's earnings presentation.
Earnings before interest, taxes, depreciation and amortisation increased 55.3% to Rs 242 crore from Rs 156 crore. The Ebitda margin, however, narrowed to 16.8% from 18.1% a year earlier.
The decline in reported profit came despite higher operating earnings as costs associated with the Comfort Click acquisition affected the bottom line. Amortisation of acquired brands rose to Rs 49 crore from Rs 4.8 crore, while finance costs included interest on the euro-denominated loan used to fund the acquisition.
Excluding amortisation of acquired brands, adjusted net profit rose 26.5% to Rs 168 crore from Rs 133 crore. The company said the Comfort Click acquisition was accretive to earnings per share.
Brand Performance
Sugar Free retained a 96.1% share of the sugar substitute category, while Sugar Free D'Lite and I'm Lite recorded double-digit growth. Glucon-D held a 59.1% market share, while RiteBite Max Protein continued to lead the nutrition protein bars, cookies and chips category, according to the company.
Everyuth recorded double-digit growth during the quarter and moved from fifth to fourth place in the facial cleansing category, with its market share rising 40 basis points year-on-year to 8.2%. It held a 49.4% share in scrubs and 75.5% in peel-off masks, according to Nielsen data cited by Zydus Wellness.
Nutralite also posted double-digit growth and maintained its leadership in the fat-spread category, according to company estimates. Nycil retained a 32.9% share of the prickly heat category.
Complan continued to grow even as the nutritional drinks category contracted. The brand retained fourth position with a 4% market share and grew faster than in the preceding quarter, according to the company's presentation.
New Products
Zydus Wellness entered the ready-to-drink nutrition beverage segment during the quarter with Complan Power Play milkshake in vanilla and chocolate flavours. It also launched VieMax Diabetes Care, a nutrition product with a low glycaemic index and high-protein and high-fibre formulation.
The company also expanded the reach of brands acquired through Comfort Click. WeightWorld entered Walmart Marketplace in the US, while WeightWorld and Maxmedix were launched on the Noon e-commerce platform in the UAE. The acquired portfolio continued to record double-digit revenue growth, according to the company.
Zydus Wellness' international business, excluding Comfort Click, recorded high double-digit revenue growth despite geopolitical disruptions. Sugar Free, Complan, RiteBite Max Protein and Nycil accounted for a significant portion of the international business.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.