Zydus Wellness Limited

Zydus Wellness reported a strong Q4 FY25 with consolidated net sales growth of 17% to ₹910.6 crores, accompanied by a 13% volume growth. For the full fiscal year 2025, revenue grew 16.2% to ₹2691.2 crores, with volume growth of 12.4%. This performance contributed to a healthy CAGR of about 10% in revenue from operations since FY21, indicating consistent growth momentum.

The Personal Care segment demonstrated robust growth, achieving 22.5% in Q4 and 33.4% for FY25, with a CAGR of 16.5% from FY21, driven by strong consumer traction. The Food & Nutrition segment also maintained its upward trajectory, growing 15.4% in Q4 and 13% for FY25, with an 8.5% CAGR from FY21, fueled by category expansion and product innovation.

The company maintained strong market leadership across key categories. Everyuth Scrub increased its market share by 321.4 basis points to 48.5%, while Everyuth Peel-off held 77.7% market share. Nycil maintained its #1 position with 33.8% market share, and Glucon D led the glucose powder category with 58.8% market share. Sugar Free continued its dominance in the sugar substitute category with 95.9% market share.

Gross margins showed consistent improvement, expanding by 42 basis points in Q4 and 168 basis points for the full year FY25, totaling 361 basis points over two years. This was attributed to strategic hedging, favorable product mix, and calibrated pricing. EBITDA grew 17.1% in Q4 to ₹190 crores and 23.2% for FY25 to ₹379.7 crores. Net profit after tax (excluding exceptional items^📎 and deferred tax assets) increased 30% for FY25 to ₹341 crores, with EPS rising from ₹41.94 to ₹54.52.

Zydus Wellness continues to drive innovation, with Everyuth entering the sheet mask category with three new variants. The company is expanding its product portfolio, including Sugarfree D'lite cookies and I'm Lite (stevia-blended low-calorie sugar alternative). The integration of Naturell India Private Limited (Rite Bite) is progressing smoothly, with the business showing over 50% growth in the four months since acquisition and positive low single-digit margins.

The Board recommended a final dividend of ₹6 per equity share, a 20% increase over the previous year, and a 1:5 stock split to improve share accessibility. The company demonstrated strong cash conversion from operations, realizing 100% of its EBITDA at ₹380 crores. Management indicated a focus on bolt-on acquisitions that are synergistic and can be funded through internal accruals, typically in the ₹100-200 crore range, rather than large-scale deals.

The overall FMCG market in India grew 9% in value and 6% in volume (MAT March 2025), with rural markets outperforming urban areas. Digital commerce, particularly quick commerce, is expanding rapidly, contributing 41% of total e-commerce. The company aims for EBITDA margins of 17-18% in the next couple of years and an A&P to sales ratio closer to 13% (+/-0.5%), while also targeting to cross ₹5,000 crores in revenue and double its international business contribution to 8-10% of its portfolio eventually.