Zydus Wellness Q1 FY27 Earnings Call — Analysis (NSE: ZYDUSWELL)
Zydus Wellness Q1FY27 revenue surges 66.7% YoY to ₹1,429.9 Cr, powered by Comfort Click and domestic core, but Nycil and summer brands drag, while net profit (excl. amortisation) jumps 26.5%.
Result quality: stable — Steady quarter. Management sentiment: optimistic.
The take
Q1FY27 Consolidated net sales ₹1,429.9 Cr ( +66.7% YoY ) . New guidance — comfort click revenue growth double digits . New story: Comfort Click international expansion .
Results
Consolidated net sales ₹1,429.9 Cr (+66.7% YoY), EBITDA ₹241.7 Cr (+55.3% YoY), net profit (excl. amortisation) up 26.5% YoY; domestic business +4.6%, international like-to-like +24.8%.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated net sales | ₹1,429.9 Cr | +66.7% | yoy · Q1FY27 |
| EBITDA | ₹241.7 Cr | +55.3% | yoy · Q1FY27 |
| Net profit growth (excl. amortisation) | 26.5% | +26.5% | yoy · Q1FY27 · excluding amortisation of acquired brands |
| Net profit growth (reported) | -7% | -7% | yoy · Q1FY27 |
| Domestic revenue growth | 4.6% | +4.6% | yoy · Q1FY27 |
| International like-to-like revenue growth | 24.8% | +24.8% | yoy · Q1FY27 · includes Comfort Click |
| Skin & Hair Care growth | 34.5% | +34.5% | yoy · Q1FY27 |
| Food & Nutrition growth | 16% | +16% | yoy · Q1FY27 |
| Seasonal brands growth | -12% | -12% | yoy · Q1FY27 |
Guidance
Comfort Click expected to sustain double-digit growth; effective tax rate guided at 25% for FY27 (part cash) and entirely cash 25% from FY28; interest run-rate to hold barring euro benchmark shifts.
What management committed to
- [Comfort Click] will maintain double-digit growth rate. — double digits, ongoing
- Effective tax rate for [Zydus Wellness] will be 25% in FY27 (with cash component of 12-15%) and entirely cash 25% from FY28. — 25%, FY28
- Interest cost run-rate will remain around the Q1FY27 level, subject to euro benchmark rate stability. — around the same amount, upcoming quarters
- [RiteBite Max Protein] will maintain its strong growth momentum. — ongoing
- [Nycil and Glucon-D seasonal brands] will end the remaining part of FY27 on a more positive note, with growth momentum returning. — Q2-Q4FY27
- [Complan] momentum will continue, supported by brand building, portfolio expansion, and distribution. — next quarters
- [Comfort Click] will remain EPS accretive and register increase in EBITDA and profit before tax if current momentum continues. — ongoing
Key themes
Premiumization, international scale-up, and innovation pipeline offset seasonal weather headwinds.
How the narrative shifted
- Premiumization tailwind: Consumers are trading up to higher-value products across personal care, beauty and packaged foods, supporting value-led growth and premium offerings.
- Quick commerce and digital shift: Digital commerce reached 21% of sales, sustaining strong double-digit growth and acting as the primary growth engine, with A&P shifting rapidly to digital.
- Comfort Click international expansion: Comfort Click entered US (D2C and Walmart marketplace) and Middle East (noon UAE, physical base), maintaining 24.8% like-to-like growth and becoming EPS accretive.
- Seasonal weather disruption: Unseasonal summer showers in east and north India disrupted demand for Nycil and Glucon-D, causing a 12% seasonal portfolio decline and channel inventory buildup.
- Innovation pipeline anchoring growth: Multiple new launches across Complan RTD, VieMax Diabetes Care, RiteBite bars/chips/RTDs, and Comfort Click range extensions, with a robust 2-3-year pipeline.
- Margin recovery via mix and refinancing: Gross margin expansion in core business combined with Comfort Click's higher margin and transition from GBP to euro loan reduced interest costs, supporting EBITDA margin improvement.
- Category headwinds in kids nutrition: Complan grew despite overall category degrowth, but management acknowledges persistent headwinds, positioning the brand to navigate through segmentation and premium nutrition.
Operational commentary
- Comfort Click expanded into US with WeightWorld D2C platform and Walmart marketplace, and into Middle East via noon UAE plus a physical base; all support teams remain in India.
- Complan outperformed category, returning to growth via core kid nutrition focus, new celebrity endorser, and expansion into toddler (NutriGro), adult (VieMax), and RTD (Power Play milkshake).
- Everyuth gained facial cleansing share, improving rank from 5th to 4th nationally, driven by tan removal and digital engagement; B2C remains priority, no B2B entry planned.
- RiteBite Max Protein sustained high growth with offline distribution expansion, new platforms (wafer bars, Roots, Korean chips, RTDs, cookies) and FIFA World Cup brand investment.
- Nycil and Glucon-D hurt by unseasonal eastern/northern rains causing double-digit decline in salient geographies, compounded by high channel inventory for Nycil; recovery seen in second half of Q1.
- Sugar Free maintained category leadership with double-digit core growth; Sugar Free D'lite and Nutralite delivered high double-digit growth, supported by AI engagement and portfolio strength.
- Quick commerce and e-commerce remained primary growth engine (21% digital share) with sustained double-digit growth and distribution expansion.
- Gross margin expansion in core business and higher Comfort Click margin drove like-to-like EBITDA margin improvement of ~0.4%.
Analyst Q&A
Q. Will Comfort Click growth rate of ~25% sustain into upcoming quarters?
We normally don't give a forward-looking. We just said double digits, so that's what we will maintain.
Q. Outlook on effective tax rate across FY27 and FY28.
Q1 effective rate 27% due to thin-cap disallowance; FY27 normalised 25% with 12-15% cash; FY28 entirely cash 25%.
Q. Can seasonal channel inventory issues roll over to next year's cycle?
Not really; own inventory similar or lower YoY, shelf life 3 years; already seeing positive growth on low base in last two months.
Q. Revenue mix evolution in protein portfolio over next 3 years.
Very hard to predict; bars are largest now, each segment has large possibilities, all driven with equal conviction.
Q. Will Everyuth expand into B2B professional face cleansing?
No. We remain focused on B2C as of now.
Q. Impact of GLP-1 adoption on Comfort Click portfolio and US entry significance.
All products OTC, no prescription needed; US business very small but growing well, too early to predict meaningfulness.
Research and educational content only. Not investment advice.