Zydus Wellness Q2 FY27 Results (NSE: ZYDUSWELL)
Signal: Loss reversed
The read
The key inflection is a return to positive consolidated PAT of 51 million from a 528 million loss, supported by gross-margin expansion to 61.2% from 52.9% and the absence of last year's 342 million exceptional charge; however, EBITDA margin at 7.6% remains below the 17.1% Q1FY27 level and group PAT is still below the 1,189 million June quarter, so the recovery is not yet a clean acceleration.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,126.6 Cr | +73.2% | -21.6% |
| EBIT | ₹28.4 Cr | Turned positive from loss | |
| Net profit | ₹5.1 Cr | Turned positive from (528) | |
| EPS | ₹0.16 | Turned positive from loss | |
| EBIT margin | 7.6% |
P&L walk
Consolidated revenue rose 73.2% YoY to 11,266 million, gross margin expanded 830bps to 61.2%, and EBITDA margin improved to 7.6% from 3.5%; PAT recovered to 51 million from a 528 million loss, helped by the absence of the 342 million exceptional charge and lower tax, but sequential momentum moderated sharply from the seasonally strong June quarter.
Segments
The group-level result is materially larger than standalone: consolidated Q2 revenue was 11,266 million versus standalone revenue of 1,668 million, and consolidated PAT was 51 million versus standalone PAT of 116 million, indicating that subsidiaries dragged group profitability despite driving most revenue.
Key positives
- Consolidated revenue rose 73.2% YoY to 11,266 million, although it declined 21.6% sequentially because the filing identifies strong seasonality in the first and last quarters.
- Gross margin expanded 830bps YoY to 61.2% as cost of materials consumed declined to 28.0% of revenue from 40.1%; the filing does not disclose the underlying cause.
- Consolidated PAT turned positive at 51 million from a 528 million loss, with no current-quarter exceptional charge versus 342 million in Q2FY26.
- Operating cash flow reached 3,121 million in H1FY27 versus 931 million in H1FY26.
Key concerns
- EBITDA margin declined 920bps sequentially to 7.6% from approximately 16.8%, and remains below the 17.1% reported for Q1FY27.
- Advertisement and promotion expense rose 110.9% YoY to 1,972 million, increasing to 17.5% of revenue from 14.4%.
- Finance costs increased 73.2% YoY to 272 million and depreciation rose 127.5% to 571 million, limiting conversion of gross-margin improvement into PAT.
- Standalone gross margin compressed 910bps YoY to 28.6%, showing that the parent-company recovery was weaker than the consolidated gross-margin headline.
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