ICICI Securities recommends reduce on Zydus Wellness, target price Rs 1,300

Synergies from acquired portfolio, wider distribution network and negligible tax rates in the near term would allow Zydus to report 26% earnings CAGR over FY19-22E. ETMarkets.com|Updated: Dec 10, 2019, 08.45 AM ISTThinkStock PhotosICICI Securities has recommended a reduce rating on the Zydus Wellness stock in the long term with a target price of Rs 1,300.…

Synergies from acquired portfolio, wider distribution network and negligible tax rates in the near term would allow Zydus to report 26% earnings CAGR over FY19-22E.

ETMarkets.com|

Updated: Dec 10, 2019, 08.45 AM IST

ThinkStock Photos

Sell-15

ICICI Securities has recommended a reduce rating on the Zydus Wellness stock in the long term with a target price of Rs 1,300. Shares of Zydus Wellness gained 2.9% to Rs 1470 on Monday while the BSE Sensex closed 42.28 points up at 40,487.43.

Company Financials




For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 326.03 crore, down -47.44% from last quarter sales of Rs 620.25 crore and up 135.89% from last year same quarter Sales of Rs 138.21 crore. The company has reported net profit after tax of Rs -12.02 crore in the latest quarter.

The company’s top management includes Dr.Sharvil P Patel, Mr.Ashish Bhargava, Mr.Ganesh Nayak, Mr.Kulin Lalbhai, Mr.Savyasachi S Sengupta, Mr.Srivishnu Raju Nandyala, Mr.Tarun G Arora, Ms.Dharmishta N Raval. Company has Dhirubhai Shah & Co. LLP as its auditors. As on 30-09-2019, the company has a total of 57,664,144 shares outstanding.

Investment Rationale

Synergies from acquired portfolio, wider distribution network and negligible tax rates in the near term would allow Zydus to report 26% earnings CAGR over FY19-22E. However, due to an increase in debt and equity, the return ratios of the company are at low single digit and would take a good five to seven years to reach double digit levels, said the brokerage.

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Disclaimer: This recommendation is analyst’s own and does not represent those of economictimes.com & ETMarkets.com. Please consult your financial advisor before taking any position in the stock/s mentioned.

Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service

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