Zydus Wellness profit plunges 95.71% QoQ as margin narrows 9.23 points
Revenue fell 21.60% QoQ while other income made up 84.21% of pre-tax profit; YoY, revenue rose 73.19% and operating margin improved 4.05 points.
Filed 03 Nov 2026, 12:31 IST · Zydus Wellness Ltd (ZYDUSWELL)
Key takeaways
- Consolidated operating margin fell 9.23 percentage points QoQ to 7.59% as revenue declined faster than expenses.
- Net profit fell 95.71% QoQ to Rs 5.1 cr, with other income contributing 84.21% of pre-tax profit.
- Year-on-year revenue rose 73.19% and operating margin improved 4.05 percentage points, reversing the Q2FY26 loss.
Price around the results
Sequential revenue drop exposes sharp profit slowdown
Consolidated revenue fell 21.60% QoQ to Rs 1,126.6 cr, while expenses declined only 12.90%, pulling operating profit down 64.63% to Rs 85.5 cr. Net profit dropped 95.71% QoQ to Rs 5.1 cr as interest rose 3.42% and depreciation stayed at Rs 57.1 cr. The YoY comparison is much stronger: revenue rose 73.19%, operating profit increased 271.74%, and the company moved from a Rs 52.8 cr loss to a Rs 5.1 cr profit.
Margin falls as costs remain sticky and profit quality weakens
The operating margin narrowed 9.23 percentage points QoQ to 7.59% because expenses fell more slowly than revenue. The tax rate rose 6.24 percentage points QoQ to 32.89%, further reducing the conversion of operating profit into net profit. Other income of Rs 6.4 cr accounted for 84.21% of pre-tax profit, making the small reported profit less representative of operating earnings.
Operating margin remains below the FMCG peer median
Operating margin has declined for two straight quarters, from 18.19% in Q4FY26 to 16.82% in Q1FY27 and 7.59% in Q2FY27. Zydus Wellness was 3.07 percentage points below the 10.66% median margin of the 45 Fast Moving Consumer Goods peers that had reported the quarter.
Quick-commerce expansion and new launches support the growth story
The company said it accelerated quick-commerce growth through a wider distribution footprint and that innovation and broader distribution helped it deliver high double-digit growth ahead of category growth. It said recent Korean-flavoured chips and protein shakes recorded high double-digit growth, while it launched Max Protein Crunchy Cookies in two flavours.
Recent stock reactions have usually been negative
After the last eight results, the stock rose twice and fell six times, with a median absolute move of 3.72%. There is no current post-results move to compare with that history yet.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,127 cr | ₹1,437 cr | -21.60% | +73.19% |
| Other income | ₹6 cr | ₹4 cr | +68.42% | — |
| Expenses | ₹1,041 cr | ₹1,195 cr | -12.90% | +65.91% |
| Operating profit | ₹86 cr | ₹242 cr | -64.63% | +271.74% |
| Operating margin (%) | 7.59% | 16.82% | — | — |
| Interest | ₹27 cr | ₹26 cr | +3.42% | +73.25% |
| Depreciation | ₹57 cr | ₹57 cr | +0.00% | +127.49% |
| Profit before tax | ₹8 cr | ₹162 cr | -95.31% | — |
| Tax | ₹3 cr | ₹43 cr | -94.21% | +13.64% |
| Net profit | ₹5 cr | ₹119 cr | -95.71% | — |
| EPS (₹) | ₹0.16 | ₹3.74 | -95.72% | — |
Operating margin of 7.59% compares with a Fast Moving Consumer Goods sector median of 10.66% across 45 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company delivered high double-digit growth, outpacing category growth through innovation and wider distribution.
- Recent launches including Korean flavoured chips and protein shakes recorded high double-digit growth.
Expansion
- The company accelerated quick-commerce growth through an expanded distribution footprint.
New products
- The company launched Max Protein Crunchy Cookies in Berry Bliss and Choco Chip Bliss flavours.
New initiatives
- The company introduced Max Protein Crunchy Cookies with 10g protein and no palm oil, maida or added sugar.
- The company strengthened youth engagement through digital campaigns, video ads and integrations with popular shows.
- The company is driving regional connect in West Bengal through an integration with Bigg Boss Bangla.
Competition
- The company maintained fourth rank in facial cleansing with an 8.4% market share.
- The company reported a 50.2% market share in scrubs, up 172 basis points year on year.
Problems & risks
- The company reported a 89-basis-point decline in peel-off mask market share.
What to watch
- Whether operating margin recovers from 7.59% after two consecutive QoQ declines.
- Whether revenue improves from Rs 1,126.6 cr after the 21.60% QoQ fall.
- Whether other income remains a large contributor after accounting for 84.21% of pre-tax profit.