Zydus Wellness (ZYDUSWELL)
TurnaroundFairStock Score: 44/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹510.3 |
| Market Cap | ₹16,235.74 Cr |
| P/E Ratio | 86.2 |
| ROCE | 6.16% |
| ROE | 0.78% |
| Dividend Yield | 0.24% |
| Profit Growth | -21.43% |
| Debt/Equity | 0.55 |
| Sales Growth | 79.23% |
| Free Cash Flow | ₹173 Cr |
| Promoter Holding | 69.64% |
| 52-Week Range | ₹367.55 — ₹611.85 |
| Sector | Food Products |
| Book Value | ₹183.12 |
Strengths
- Promoter holding at 69.64% ensures strong insider alignment and long-term commitment.
- Positive free cash flow of ₹173 Cr provides a cushion despite the net loss.
- Debt/Equity of 0.53 is acceptable and not overly leveraged.
- Brand-backed packaged foods business from the Zydus group with a wide distribution network (inferred from industry, but not in data).
Concerns
- ROE of 0.78% and ROCE of 6.16% are far below cost of equity; value creation is almost nil.
- Latest quarter net loss of ₹40 Cr with profit growth down 643% points to serious earnings deterioration.
- P/E of 50.94 and P/B of 3.97 are rich for a business earning less than 1% on equity.
- Piotroski F-Score of 4/9 signals poor financial health.
AI Analysis
At ₹498.85, Zydus Wellness trades at 50.94 times earnings and nearly 4 times book value. As Graham said, price is what you pay, value is what you get. What are we getting here? Return on equity is just 0.78%, and ROCE is 6.16% — barely above inflation. The latest quarter reports a ₹40 Cr net loss on sales of ₹965 Cr. Profit growth has collapsed by 643%. This is not a wealth-compounding machine. The 5-year revenue CAGR of 7.73% tells me the underlying business grows modestly; that headline sales growth of 108.90% smells of acquisition, not organic demand. There is some good news: free cash flow is positive at ₹173 Cr, debt-to-equity is reasonable at 0.53, and promoter holding at 69.64% aligns interests. But positive FCF is just 1.4% of the market cap, so the market is paying a huge premium for this. A Piotroski score of 4/9 suggests financial health is deteriorating. At over 3 times book value and 50 times earnings, the margin of safety is absent. This is a potential turnaround story, but as Buffett says, turnarounds rarely turn. I need to see proof of profitability for at least four quarters before I get interested. For now, it's a well-intentioned watchlist candidate, not an investment.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer