Zydus Wellness margin drops to 7.71% as costs outpace revenue
Standalone revenue rose 15.38% QoQ, but expenses grew 25.18%; other income supplied 66.22% of pre-tax profit.
Filed 04 Aug 2026, 12:18 IST · Zydus Wellness Ltd (ZYDUSWELL)
Key takeaways
- Standalone operating margin fell 7.22 percentage points QoQ to 7.71% as expenses grew +25.18% against revenue growth of +15.38%.
- Standalone net profit fell -21.43% YoY to Rs 5.5 cr despite revenue growth of +74.46%, as expenses grew +88.02%.
- Other income accounted for 66.22% of pre-tax profit, while the tax rate rose 13.18 percentage points QoQ.
Price around the results
Revenue momentum did not translate into profit
Standalone revenue rose +15.38% QoQ and +74.46% YoY, but operating profit fell -40.40% QoQ and -6.35% YoY. Net profit declined -58.65% QoQ and -21.43% YoY. Higher depreciation, up +425.00% YoY, and interest, up +30.43% YoY, added to the pressure below operating profit.
Costs pushed margin well below FMCG peers
QoQ expenses grew +25.18%, faster than the +15.38% revenue increase, cutting operating margin by 7.22 percentage points. YoY expenses also grew faster than revenue, +88.02% versus +74.46%, narrowing margin by 6.66 percentage points. At 7.71%, the standalone operating margin was 8.77 percentage points below the 16.48% median of 22 reporting Fast Moving Consumer Goods peers, ranking fourth from the bottom.
Margin recovery reversed after Q4
Operating margin had recovered to 14.93% in Q4FY26 after 13.56% in Q3FY26, but fell to 7.71% in Q1FY27. The profit mix was also weak: other income contributed 66.22% of pre-tax profit. QoQ, the tax rate rose 13.18 percentage points, further reducing the conversion of pre-tax profit into net profit.
Management pointed to brand and distribution traction
Management said distribution expansion for Rite Bite Max Protein supported quick-commerce growth, while the brand's recent launches included a Ghee Jaggery Bar, Korean-flavoured Protein Chips, Protein Shake and Wafer Bar products. The company said Rite Bite Max Protein exceeded internal projections on value and volume growth. Management also said the Tan Removal portfolio benefited from the Face Wash launch and that Cuticolor exceeded internal expectations in organised retail; the presentation said the scrub sub-segment held a 49.4% market share.
Results history points to a usually negative reaction
After the last 8 results, the stock rose 2 times and fell 6 times, with a median absolute move of 3.72%. The current filing has no recorded market reaction yet, so its eventual move can be viewed against that generally negative history.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹153 cr | ₹133 cr | +15.38% | +74.46% |
| Other income | ₹5 cr | ₹5 cr | +2.08% | +1125.00% |
| Expenses | ₹141 cr | ₹113 cr | +25.18% | +88.02% |
| Operating profit | ₹12 cr | ₹20 cr | -40.40% | -6.35% |
| Operating margin (%) | 7.71% | 14.93% | — | — |
| Interest | ₹3 cr | ₹3 cr | -3.23% | +30.43% |
| Depreciation | ₹6 cr | ₹6 cr | +0.00% | +425.00% |
| Profit before tax | ₹7 cr | ₹15 cr | -51.32% | -22.11% |
| Tax | ₹2 cr | ₹2 cr | +0.00% | -24.00% |
| Net profit | ₹6 cr | ₹13 cr | -58.65% | -21.43% |
| EPS (₹) | ₹0.17 | ₹0.42 | -59.52% | -84.55% |
Operating margin of 7.71% compares with a Fast Moving Consumer Goods sector median of 16.48% across 22 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Rite Bite Max Protein significantly outperformed internal projections with robust value and volume growth.
- The Tan Removal portfolio strengthened after the Face Wash launch, outperforming company estimates.
- Cuticolor recorded strong demand traction and exceeded internal expectations in organised retail channels.
Expansion
- The company expanded distribution for Rite Bite Max Protein, supporting quick-commerce growth.
New products
- Recent Rite Bite launches included a Roots Ghee Jaggery Bar, Korean-flavoured Protein Chips, Protein Shake and Wafer Bar portfolio.
- The company recently launched the Tan Removal Face Wash.
New initiatives
- The company partnered with Femina to strengthen Cuticolor’s scalp-care credentials and premium positioning.
Competition
- The brand led the scrub sub-segment with a 49.4% market share.
What to watch
- Whether operating margin recovers from 7.71% after the 7.22-percentage-point QoQ decline.
- Whether expense growth falls below the +25.18% QoQ pace relative to revenue growth of +15.38%.
- Whether other income remains a large contributor after accounting for 66.22% of pre-tax profit.