Attractive valuations, synergy benefits and focused brand management make Zydus Wellness an interesting investment opportunity

Low profile ISGEC Heavy Engineering may surprise with outperformance vis-a-vis its peer group. Order book position provides earnings visibility
August 31, 2020

Zydus Wellness is the FMCG subsidiary of the pharma giant Cadilla Healthcare. It is renowned for its brand “Sugarfree” which was the first sugar substitute brand in India and remains a market leader. In 2019 it acquired Glucon-D, Complan and Nycil from Heinz for Rs. 4,595 crores. The company has successfully integrated these brands and benefits of synergy and sharper management focus should lead to higher and more profitable growth trajectory. Efforts are on to reduce the debt burden of ~ 1500 crores and if that is successful, then interest costs will be reduce significantly. We have an over weight rating on the company due to attractive valuations and strong brands in under penetrated FMCG categories – 04-09-2020 Price: 1594.50 Rating: Over Weight Recommendation: Buy

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