Zydus Wellness margin rebounds, but higher costs weigh on year-on-year profit
The consolidated operating margin rose 11.87 percentage points sequentially, while sharply higher interest and depreciation kept net profit below last year's level.
Filed 18 May 2026, 12:51 IST · Zydus Wellness Ltd (ZYDUSWELL)
Key takeaways
- Consolidated operating margin recovered 11.87 percentage points sequentially to 18.19% as revenue grew +53.87% while expenses rose +34.37%.
- Year-on-year revenue rose +62.60%, but expenses grew faster at +67.97%, narrowing operating margin by 2.62 percentage points to 18.19%.
- Net profit fell 5.76% year on year to Rs 162.0 cr as interest rose 821.43% and depreciation increased 318.94%, despite other income contributing only 0.68% of pre-tax profit.
Price around the results
A sharp sequential recovery, but a softer year-on-year margin
Zydus Wellness reported consolidated revenue growth of +53.87% sequentially, and expenses grew more slowly at +34.37%, lifting operating margin by 11.87 percentage points. The year-on-year comparison is less favourable: revenue rose +62.60%, but expenses increased +67.97%, reducing margin by 2.62 percentage points. At 18.19%, the margin was above the 16.75% median for the 26 Fast Moving Consumer Goods peers that had reported, by 1.44 percentage points.
Interest and depreciation absorbed the operating recovery
The improvement in operating profit did not flow through to net profit year on year because interest increased 821.43% and depreciation rose 318.94%. Pre-tax profit therefore grew only +2.25%, while the tax rate increased by 7.76 percentage points to 8.63%; net profit declined 5.76%. Other income was only 0.68% of pre-tax profit, so it did not materially support reported earnings.
Margin direction turns up after two weak quarters
Operating margin fell from 18.07% in Q1FY26 to 3.54% in Q2FY26, then recovered to 6.32% in Q3FY26 and 18.19% in Q4FY26. This marks a sequential rebound rather than a continued decline, but the latest margin remains below the 20.81% recorded in Q4FY25. Management said WeightWorld and maxmedix were launched on Boots.com in the UK and Amazon in the UAE, while Max Protein continued expanding its quick-commerce distribution footprint.
Brand launches and marketing broaden the growth effort
Management said digital, TVC, influencer-led and Glance AI-powered campaigns were used to expand the user base. It also said Tan Removal launched a Face Wash in Q4FY26, while the scrubs business reached a 48.6% market share, up 8.7 basis points year on year. The company said its facial-cleansing brand ranked fifth with an 8.0% market share, up 37.6 basis points year on year.
The initial stock move was within its usual results range
The stock fell 1.29% on the results date and was down 3.17% after five sessions, versus a median absolute move of 3.72% across the last eight results reactions. That makes the early response ordinary in magnitude, though the historical pattern has been more negative than positive, with five down moves and three up moves.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,485 cr | ₹965 cr | +53.87% | +62.60% |
| Other income | ₹1 cr | ₹-6 cr | — | +50.00% |
| Expenses | ₹1,215 cr | ₹904 cr | +34.37% | +67.97% |
| Operating profit | ₹270 cr | ₹61 cr | +342.79% | +42.16% |
| Operating margin (%) | 18.19% | 6.32% | — | — |
| Interest | ₹39 cr | ₹41 cr | -6.07% | +821.43% |
| Depreciation | ₹55 cr | ₹56 cr | -0.36% | +318.94% |
| Profit before tax | ₹177 cr | ₹-42 cr | — | +2.25% |
| Tax | ₹15 cr | ₹-2 cr | — | +920.00% |
| Net profit | ₹162 cr | ₹-40 cr | — | -5.76% |
| EPS (₹) | ₹5.09 | ₹-1.25 | — | -81.16% |
Operating margin of 18.19% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.29% | -1.32% |
| Next session | +1.38% | — |
| 5 sessions | -3.17% | -4.81% |
| 15 sessions | +1.41% | — |
| 30 sessions | +13.21% | — |
Volume on the results session was 1.24× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- WeightWorld and maxmedix were launched on Boots.com in the UK.
- WeightWorld and maxmedix were launched on Amazon in the UAE.
- Max Protein continued expanding its distribution footprint through quick commerce.
New products
- Tan Removal launched a Tan Removal Face Wash in Q4 FY26.
New initiatives
- The company used digital, TVC, influencer-led and Glance AI-powered campaigns to expand its user base.
Competition
- The company reported a 48.6% market share in scrubs, up 8.7 basis points year on year.
- The brand ranked fifth in facial cleansing with an 8.0% market share, rising 37.6 basis points year on year.
What to watch
- Whether consolidated operating margin holds above 18.19% after the Q4FY26 rebound.
- Whether interest remains close to the Q4FY26 level after rising 821.43% year on year.
- Whether net profit conversion improves from the 8.63% tax rate and 0.68% other-income share of pre-tax profit.