ZYDUSWELL Q3 FY26 earnings call.
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Revenue
₹965 Cr
verified against source
Revenue YoY
113.7%
reported change
EBITDA
₹61 Cr
latest reported figure
Source
screener in enriched
record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Zydus Wellness reported Q3 FY26 with consolidated EBITDA of INR 610 million, up 312.2% YoY, expanding margins by 310bps to 6.3%. Net sales grew 113.7% on acquisition-driven mix, with food and nutrition surging 134% while personal care declined 1.4%. The newly acquired Comfort Click business contributed meaningfully with higher gross margins, lifting consolidated gross margins to ~63% for the quarter, though management guided ~66-67% annualized as baseline. The company remains focused on expanding EBITDA margins to 16-17% for the base business and Comfort Click to 14%+ over two years, supported by operating leverage and innovation investments. Right by Max Protein continues outperforming expectations at near double-digit EBITDA margins with 500 crore revenue aspirational target in ~2 years. Key risks include GDL/Glucon-D seasonality dependence, high milk input costs, interest and amortization drag from acquisitions (INR 371 million quarterly interest, INR 472 million D&A), and MAT provision changes from the budget.
Colored figures show movement against the previous available record.
Guidance to track
- Consolidated gross margins are expected to normalize to 66-67% on an annualized basis, as the high Q3 level was driven by Comfort Click mix.
- Management targets taking base business EBITDA margins to 16-17% over the next two years, from current thin levels (~10-15 crore absolute), through operating leverage and strategic investments.
- Comfort Click is expected to operate at 14%+ EBITDA margins with path toward 16-17% levels as business mix improves and D2C scaling continues.
- Current financial year FY26 will be the bottom for P&L at PAT level; from FY27 onwards, the company expects to be EPS-accretive including the newly acquired entity.
Risks flagged
- GDL and Glucon-D contribute disproportionately to margins with much higher index than average. Two consecutive weak seasons (calendar 2025 was worst in 6-8 years) have depressed margins significantly. A normal or good season in calendar 2026 is critical for margin recovery.
- Comfort Click acquisition was funded via a 5% bridge loan generating ~INR 371 million quarterly interest expense. Combined with ~INR 472 million quarterly D&A amortization from brand acquisitions, these non-cash charges suppress PAT significantly.
- Multiple analysts requested improved segmental disclosure (comfort click metrics, base business vs. acquired business separation) for better tracking. Management acknowledged the request but deferred to end of fiscal year for implementation, limiting transparency in near term.
- New MAT provisions announced in the budget were raised by analysts. Management stated their team is analyzing the impact and will disseminate information in ~2 weeks, indicating potential tax rate guidance revision.
Key quotes
- Anything is possible... the market is addressable and large enough. But trust us, we are also doing enough initiatives to drive other businesses.
- Typically because of the mix, you would have seen that our Q4, Q1 operate at higher margins. This quarter the whole mix has got lifted further because Comfort Click operates at a much higher level.
- It's very hard to have back-to-back seasons go wrong. Even if the seasons do not work out, the normalized base will certainly give us growth.
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