- Zydus Wellness gross margin rose 515bps YoY to 52.9%, aided by mix and efficiencies
- Ebitda increased 17.3% YoY to Rs 230 million, with margin at 3.5% down 45bps YoY
- Q2 FY26 was strategic but faced muted organic growth due to GST disruption and seasonality
Zydus Wellness' gross margin expanded 515bps YoY to 52.9%, supported by improved mix and operating efficiencies despite seasonal softness. Ebitda stood at Rs 230 million (+17.3% YoY), with Ebitda margin at 3.5% (-45bps YoY), reflecting higher advertising and promotion investments and one-off integration costs from Comfort Click and Naturell.
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ICICI Securities Report
Zydus Wellness Ltd.'s Q2 FY26 was a strategically important yet transitional quarter – strategic in direction but impacted by muted organic momentum amid GST-led disruption and seasonal weakness.
We reckon LFL revenues were flat and its non-seasonal portfolio grew in double digits. Reported revenue growth (+32% YoY) was driven by the Comfort Click acquisition, expanding Zydus' global wellness footprint and providing an entry into the high-margin vitamins, minerals and supplements adjacencies.
Profitability was impacted on account of higher overheads due to integration of acquired business and continued investment behind brands.
Zydus' strategy remains sound, and disciplined execution should drive steady, profitable growth through FY26–27E. Maintain Buy.
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