Summary
Zydus Wellness Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 3, 2026, 4:00 p.m. IST
Event Participants
Executives 2 Tarun Arora (CEO & Whole-Time Director), Umesh Parikh (CFO)
Analysts 6 Aditya (Sowilo Investment Managers), Jaymin (ARDEKO Asset Management), Kinjal Mota (Banyan Tree Advisors), Mayur Parkeria (Wealth Managers India), Naveen Trivedi (Motilal Oswal), Tejash Shah (Avendus Spark)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Net Sales | ₹541.3 crores* | +113.7% YoY; growth significantly driven by the consolidation of the Comfort Click acquisition. |
| Food & Nutrition Sales | Not explicitly stated | +134% YoY; driven by strong performance in RiteBite and inclusion of new wellness categories. |
| Personal Care Sales | Not explicitly stated | -1.4% YoY; decline primarily attributed to Nycil performance following a poor monsoon season. |
| Gross Margin | 63.0% | Significant expansion vs prior year; driven by the high-margin mix of the Comfort Click business. |
| EBITDA | ₹61.0 crores | +312.2% YoY; quarterly margins expanded to 6.3% from 3.2% YoY. |
| Finance Costs | ₹37.1 crores | Reflects interest on the 5% low-cost bridge loan used for the Comfort Click acquisition. |
| Adjusted Net Loss | (₹33.3 crores) | Excludes exceptional items; loss driven by high amortization of acquired brands and interest costs. |
| Amortization (Brands) | ₹47.2 crores | Non-cash charge related to the accounting of acquired brand valuations. |
Note: Absolute Net Sales derived from % growth and base year context; management noted consolidated EBITDA of ₹610 million at 6.3% margin.
Geographic & Segment Commentary
- International Business: International markets now contribute approximately one-third of total revenue. The Comfort Click business is expanding its European footprint into Poland, Finland, and Portugal, while maintaining 8-10% market share in core markets like the UK, Germany, and Italy.
- Sweetener Portfolio (Sugar Free): Market share expanded by 80 bps as per MAT December 2025. Sugar Free Green recorded its 19th consecutive quarter of double-digit growth, supported by the expansion of the “Delight” cookies range.
- Protein Snacking (RiteBite Max Protein): Business doubled its legacy performance and exceeded internal projections. EBITDA margins have improved from breakeven at acquisition to near double-digits, supported by the new Wafer Bar launch and entry into 9 international markets.
Company-Specific & Strategic Commentary
- Comfort Click Integration: The acquisition remains cash EPS accretive; management is focusing on driving D2C sales over marketplaces to own long-term customer value.
- Complan Re-positioning: Management plans a series of relaunches and new product introductions to reframe the brand’s relevance in contemporary nutrition; partnered with cricketer Vaibhav Suryavanshi for youth outreach.
- Portfolio Diversification: Launched adult gummies, probiotic gummies for kids, and Shilajit Resin under the Comfort Click platform; initiated distribution for Cuticolor (hair color) in organized channels.
- B2B Expansion: Nutralite Professional expanded its food service portfolio with Cheesy Delight and Slim Mayonnaise variants to address evolving taste preferences.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Annual Gross Margin | 66% - 67% | Target for the combined consolidated entity on an annualized basis. |
| Base Business EBITDA Margin | 16% - 18% | Management remains committed to reaching these levels over the next 1-2 years. |
| Comfort Click EBITDA Margin | 14% + | Sustained double-digit top-line growth expected to support these margin levels. |
| PAT Level Accretion | FY 2027 | Newly acquired entities are expected to be EPS accretive at the PAT level from the next financial year. |
Risks & Constraints
| Risk | Context |
|---|---|
| Seasonality (Nycil/Glucon-D) | High dependence on summer weather; FY26 was a “washout” due to unseasonal rains, impacting high-margin volumes and trade inventory. |
| Raw Material Volatility | Milk prices remain a key input concern, though other raw materials are currently under control. |
| Integration/Digital Execution | Comfort Click is a digital-first business; failure to maintain high D2C repeat rates or manage digital marketing ROI could impact margins. |
Q&A Highlights
Integration and Margins
- Question: Is the 63% gross margin a new normal? (Tejash Shah)
- Answer: It is the “new normal” due to the business mix shift toward Comfort Click, which operates at much higher margins. Annualized consolidated gross margins should sit around 66-67%. (Umesh Parikh/Tarun Arora)
Comfort Click Performance
- Question: What metrics are tracked for the international business? (Jaymin)
- Answer: We track country-wise growth and D2C vs. Marketplace mix. D2C performance is ahead of plan, and we see healthy repeat purchase rates of over 50% on marketplaces. (Tarun Arora)
RiteBite Growth Drivers
- Question: Is RiteBite growth distribution-led? (Tejash Shah)
- Answer: It is a combination of sharp, targeted distribution in top cities and high growth in Q-commerce/E-commerce. We are also seeing strong repeats and operating leverage as we scale toward ₹500 crores in revenue. (Tarun Arora)
Seasonality and Inventory
- Question: What is the status of channel inventory for Glucon-D and Nycil? (Mayur Parkeria)
- Answer: Seasonality in CY2025 was the worst in 8 years. We have absorbed some inventory hits to clean the channel and expect fresh stock buildup for the upcoming season starting April. (Tarun Arora)
Key Takeaway
Zydus Wellness reported a transformative quarter with net sales growing 113.7% YoY, primarily driven by the full consolidation of Comfort Click and the continued outperformance of RiteBite Max Protein. While the Personal Care segment (Nycil) faced headwinds due to poor seasonality, the Food & Nutrition segment surged 134%, lifting consolidated gross margins to 63%. Strategically, the company is pivoting toward a more digital-heavy, international mix, with international sales now comprising one-third of the business. Management is focused on cleaning trade inventory ahead of the FY27 summer season and anticipates the new acquisitions will become PAT-accretive by next year. Key watch points include the recovery of legacy seasonal brands and the successful scaling of the D2C platform in Europe, as the company targets an 18% EBITDA margin for its base business in the medium term.
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