Zydus Wellness Q1 FY27 Results (NSE: ZYDUSWELL)
Signal: Growth reaccelerated
The read
The acquisition-led scale-up remains intact, with revenue at ₹14,370 million, +66.9% YoY, but the trajectory is not yet converting proportionately into earnings: EBITDA margin fell 90bps to 17.1% and PAT declined 7.0% to ₹1,189 million, while gross margin expanded 1,070bps and subsidiaries supplied most of the profit.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,437 Cr | +66.9% | -3.2% |
| EBIT | ₹188.4 Cr | N/A | |
| Net profit | ₹118.9 Cr | -7.0% | |
| EPS | ₹3.74 | -7.0% | |
| EBIT margin | 17.1% |
P&L walk
Consolidated revenue increased to ₹14,370 million, +66.9% YoY and -3.2% QoQ, while gross margin expanded to 65.7% from 55.0% and EBITDA margin declined to 17.1% from 18.0% as employee, promotion and other operating costs remained material; PAT fell 7.0% YoY to ₹1,189 million.
Segments
The group operates in one Consumer Products segment, but subsidiaries are the earnings engine: six subsidiaries reported pre-consolidation PAT of ₹1,268 million versus standalone PAT of ₹55 million, creating a material consolidated-standalone gap.
Key positives
- Revenue increased 66.9% YoY to ₹14,370 million, extending the acquisition-led scale-up from ₹8,609 million in Q1FY26.
- Gross margin expanded 1,070bps YoY to 65.7% as raw-material consumption declined to 21.4% of revenue from 31.0%; the filing does not disclose whether this reflects pricing, mix or input-cost benefits.
- Subsidiaries reported ₹1,268 million of pre-consolidation PAT, materially above standalone PAT of ₹55 million, confirming that the group's earnings base now sits largely outside the parent entity.
- Other income was ₹38 million, only a modest component of consolidated PBT of ₹1,621 million, so the consolidated result was operationally grounded.
Key concerns
- EBITDA margin contracted 90bps YoY to 17.1% despite gross-margin expansion, indicating that the enlarged operating-cost and depreciation base absorbed much of the gross-profit benefit.
- PAT declined 7.0% YoY to ₹1,189 million while revenue grew 66.9%, showing weak earnings conversion during the integration and expansion phase.
- Finance costs increased 952.0% YoY to ₹263 million, adding pressure below EBITDA despite a 32.0% sequential decline.
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