Mehabe score: 5 G Factor: 5 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 7.
Description
Zydus Wellness operates as an integrated consumer Company with business encompassing the entire value chain in the development, production, marketing and distribution of health and wellness products. The product portfolio of the Company includes brands like Sugar free, Everyuth and Nutralite.(Source : 202003 Annual Report Page No: 83)
Main Points
Acquistion by Cadilla Healthcare #
ZWL started its business under the name Carnation Health foods and Cadilla Healthcare acquired 61.5% of the company on June 8 2006, making it as a subsidiary. Cadilla transferred its consumer products division and renamed the company as Zydus wellness Limited.Site:ZYDUSWELLMain Symbol:ZYDUSWELL
Stock trades at 2120.0, above its 50dma 2073.01. It also trades above its 200dma 1927.6. The stock remains bullish on techicals
The 52 week high is at 2324.90 and the 52week low is at 1313.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 19.51% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 21.39%
Weakness
– Stock is trading at 2.95 times its book value
-Tax rate seems low
– has a low return on equity of 6.27% for last 3 years.
-Promoter holding has decreased over last 3 years: -7.72%
Competition
– The industry trades at a mean P/E of 50.9x. Tasty Bite Eat. trades at the industry’s max P/E of 122.54x. ZYDUSWELL trades at a P/E of 53.8x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. ZYDUSWELL has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 8.2%. The max 1- month return was given by KRBL: a return of 29.83 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 606.0 cr compared to Rs 488.0 cr for period ended Mar 2020, a rise of 24.2%
Operating Profits reported at Rs 145.0 cr for period ended Mar 2021 vis-vis 105.0 for period ended Mar 2020 .
Operating Margins expanded 241.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 20.92 compared to Rs 0.27 for previous quarter ended Dec 2020 and Rs 11.98 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1867.0 cr for period ended Mar 2021 vis-vis sales of Rs 1767.0 cr for the period ended Mar 2020, a growth of 5.4%. The 3 year sales cagr stood at 53.8%.
Net Profit reported at Rs 119.0 cr for period ended Mar 2021 vis-vis sales of Rs 142.0 cr for the period ended Mar 2020, falling 19.3%.
Company reported a poor Net Profit CAGR of -3.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 287.0 cr for period ended Mar 2021 vis-vis Rs 259.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 6.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 51% on a 1 Year basis vis-vis a return of 13% over the last 3 Years. – The compounded sales growth on a TTM bassis is 6% vis-vis a compounded sales growth of 54% over the last 3 Years. – The compounded profit growth on a TTM basis is 39% vis-vis a compounded profit growth of 24% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 2.76% vis-vis 1.59% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 7.46% vis-vis 7.42% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 19.51% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 21.39% – Stock is trading at 2.95 times its book value
-Tax rate seems low
– has a low return on equity of 6.27% for last 3 years.
-Promoter holding has decreased over last 3 years: -7.72%
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 2073.01 and is trading at 2120.0, thus bullish price action wise.
