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    Zydus Wellness Limited

    ZYDUSWELL
    Fast Moving Consumer Goods·5 Nov 2025
    Management Summary

    Zydus Wellness reported a robust 31% consolidated net sales growth in Q2 FY26, largely propelled by the Comfort Click acquisition and resilient performance in non-seasonal categories. Despite this, the company posted a net loss of INR52.8 crores due to exceptional items and amortization, while seasonal brands faced headwinds from extended monsoons and GST 2.0 implementation caused temporary trade disruptions. Management remains optimistic about future growth and margin expansion.

    Highlights

    6

    • Consolidated net sales grew 31% for the quarter, driven by strong sales performance of newly acquired entities.

    • Consolidated EBITDA was INR23 crores (INR230 million), a growth of 17.3% year-on-year.

    • Acquisition of Comfort Click Limited and its subsidiaries enhanced overseas digital business platform and expanded footprint in consumer healthcare.

    • The company registered strong double-digit growth, excluding the impact of seasonal brands and the newly acquired Comfort Click business.

    • Complan maintained its market share and improved its position from fifth to fourth according to Nielsen.

    • Sugar Free Green continues its double-digit growth for the 18th consecutive quarter.

    Concerns

    4

    • Consumption trends were influenced by early and extended monsoons, impacting sales in key seasonal categories.

    • Net loss of INR52.8 crores (INR528 million) reported, including exceptional items and non-cash amortization.

    • Transitory business disruptions occurred due to GST 2.0 implementation, particularly within trade channels.

    • EBITDA margin was relatively lower compared to last year, attributed to the deleverage of seasonal brands.

    What Changed1

    vs Q3 FY26

    Risks discussed2 → 4 (+2)
    Key financials

    Metrics

    6

    Periods

    3

    Headline

    1
    • Amortization (Quarterly)
      ₹40 Cr

    Q2

    4
    • Consolidated Net Sales Growth
      31%
      YoY+31%
    • Consolidated EBITDA
      ₹23 Cr
      YoY+17.3%
    • Consolidated Net Loss
      ₹52.8 Cr
    • Adjusted Net Loss
      ₹18.6 Cr

    H1

    1
    • Consolidated Net Sales Growth
      12.8%
      YoY+12.8%

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Debt

    Debt disclosed

    Cost 5.0% · Maturity: 15 months

    M&A

    Comfort Click Limited and its subsidiaries

    acquisition · integrated

    M&A

    Naturell (India) Private Limited

    divestment · integrated

    Guidance & targets

    4
    CategoryTargetPriority
    Margin
    EBITDA Margin
    17-18%
    		High
    Distribution
    Direct Distribution Outlets
    3 million, then 3.5 million
    		Medium
    Revenue
    Overall Growth
    double-digit growth
    		High
    Acquisition Performance
    Comfort Click Performance
    in line with forecast
    		Medium

    Geographical Segmental Reporting

    next few months / end of FY26
    CurrentNot currently provided
    TargetReview and potential implementation by end of FY26

    Why it matters

    Will provide better transparency and tracking for international and domestic business performance.

    So I think it's a good suggestion. We will review it at the end of this financial year, because we do believe that the best way to do segmental reporting is at the beginning of a financial year. So over the next few months, we will consider this suggestion and relook at it if we need to revisit the segmental support disclosures.

    How to verify

    key_financials.segment_breakdown

    Risks & concerns

    4
    RiskSeverity

    Impact of early and extended monsoons on seasonal categories

    Early and extended monsoons impacted sales in key seasonal categories like Glucon-D and Nycil, leading to deleverage and lower margins. — Management acknowledged

    medium

    Transitory business disruptions from GST 2.0 implementation

    GST 2.0 led to temporary disruptions within trade channels, but these effects have largely stabilized. — Management acknowledged

    low

    Mixed impact of divergent input cost trends

    Key commodities show divergent pricing trends, with some inputs easing and others remaining firm, leading to a mixed impact on the overall cost basket. — Management acknowledged

    medium

    Inaccurate market share reporting by Nielsen/IQVIA for sweeteners and e-commerce

    Nielsen/IQVIA reporting for sweeteners and e-commerce is not fully capturing market realities, making it difficult to assess true category growth and market share. — Management acknowledged

    medium

    Q&A highlights

    8

    “We don't give separate numbers. But to understand the like-to-like performance of our core business, it would have been a little helpful since this is the first time the consolidation has started. So for your help, what we can say is that we have given the full year financial numbers at the time of acquisition. We just have a 1 month of numbers that have come in, and it's largely in line with that. So that should be able to -- I mean, that's the most we could help you with.”

    Analyst sought specific financial details for the newly acquired entity, but management declined to provide them, citing short period and policy.

    asked by Mayur Parkeria

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 FY26 Consolidated Performance

    Zydus Wellness reported a consolidated net sales growth of 31% for Q2 FY26 and 12.8% for the first half of FY26. The company's consolidated EBITDA for the quarter stood at INR23 crores (INR230 million), marking a 17.3% year-on-year growth. However, the company recorded a consolidated net loss of INR52.8 crores (INR528 million), which includes exceptional items📎 and non-cash amortization. The adjusted net loss, excluding these items📎, was INR18.6 crores (INR186 million).

    02

    Impact of Seasonal Factors and GST 2.0

    Consumption trends during the quarter were adversely affected by early and extended monsoons, which impacted sales in key seasonal categories like Glucon-D and Nycil. Management noted that this led to a deleverage effect, contributing to relatively thinner margins for the quarter. Additionally, the implementation of GST 2.0 caused transitory📎 business disruptions within trade channels as they adapted to the new compliance framework, though these effects have largely stabilized.

    03

    Comfort Click Acquisition and Integration

    The acquisition of Comfort Click Limited and its subsidiaries (WeightWorld, maxmedix, and Animigo) has significantly strengthened Zydus Wellness's international presence across the U.K., European Union, and the U.S.A. This acquisition, funded by a 15-month bridge loan at a 5% interest rate, is considered cash EPS accretive, excluding one-time📎 exceptional costs📎. The company increased its intangibles by approximately INR2,500 crores and goodwill by INR800 crores, with INR2,400 crores of the intangibles being amortized equally over 15 years, resulting in an additional INR40 crores per quarter in expenses.

    04

    Core Brand Performance and New Product Launches

    Complan maintained its market share and improved its position from fifth to fourth according to Nielsen's September 2025 report. Sugar Free continues to demonstrate double-digit growth, with Sugar Free Green achieving this for the 18th consecutive quarter. The company also introduced Nutralite Activ Peanut Butter, a plant-based range, and RiteBite millet wafer protein bars, which contain 10 grams of protein, no maida, no palm oil, and zero added sugar, catering to growing consumer demand for healthy snacking.

    05

    Distribution and Digital Channel Expansion

    Zydus Wellness is actively expanding its general trade distribution, adding more towns and personnel. Quick commerce and e-commerce channels continue to exhibit strong growth, reflecting a sustained shift in consumer purchasing behavior towards digital platforms. The company aims to increase its direct distribution reach from over 6.2 lakh outlets to 3 million and then 3.5 million outlets in the next couple of quarters, emphasizing a multi-channel approach to reach consumers wherever they shop.

    06

    ESG Performance and Future Outlook

    For FY25, Zydus Wellness's ESG score improved by 6.3% to 84, placing it in the 99th percentile among 331 global companies in the FOA food products industry group and securing the third highest position globally. The company remains committed to achieving a 17-18% EBITDA margin within the next two years through gross margin improvements and operating leverage, and aspires for double-digit overall growth over the next 3 to 5 years.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.