Zydus Wellness Manikandan V

Eswar Rohith P
Nishitha V
Pravalika J
• Has about 26 yrs of operational excellence
• Market leader in the low calorie sweetener segment- 94% market share
• 22x increase in shareholder value in the last 9 years to reach a market
valuation of Rs 5,000 Cr+
• Previous acquisition- Carnation-Nutra Analogue Foods Ltd. (Nutralite brand)
• Nutralite brand now commands a 40% market share in butter substitute market
• Chose business segments carefully — those with little competition but huge
growth potential

Company’s Past
• Acquisition includes the brands Complan, Glucon D, Nycil & Sampriti
• Zydus Wellness and Cadila Healthcare jointly to acquire Heinz India for Rs
4,595 crore
• Funding through a mix of debt & equity
• The brands being acquired are well in line with Zydus’ segment
• The 4 brands acquired saw a turnover of Rs 1,150 Cr & EBITDA of Rs 225
Cr, for the 12 months ended on June 30th 2018
• An increase in Zydus Wellness revenue by 3 times

Heinz Acquisition
 Pre-Acquisition Post Acquisition

Manufacturing Plants 3 5

Brands 4 8

Distributors 1000+ 1800

Consumer Touch Points 825,000+ Nearly 2 million

Revenue CAGR 4% 10% (Expected)

Heinz Acquisition (Contd…)

• Both the businesses will be run independently because there is growth
potential for both
• Certain logistics and distribution synergies will be formed
• In the longer term, synergies on the cost side, material side among other
things are expected
• Focussing on herbal variants for Everyuth
• Open to launching lotions & facial creams under Everyuth brand
• The diabetic market is pretty big and has high penetration potential

Future Prospects
• A clear strategy for continuous growth
• Portfolio of strong brands
• Endeavouring to improve quality of life through innovation
• Strong distribution that feeds consumers demand
• Merit driven Professional Organization
• People Centric and Value driven

Right Recipe for growth

• Adaptable to Change – Can do Spirit
• People-driven
• Committed to deliver- On time delivery
• Innovation in what we do
• Humble
• Value-driven

Core Values
Name Designation

Dr. Sharvil P Patel Chairman

Tarun Arora Whole-time Director

H. Dhanrajgir Independent Director

Kulin S Lalbhai Independent Director

Ganesh Nayak Non-executive Director

Prof. Indiraben Parikh Independent Director

Board Of Directors
Product Category Position Share (%)

Sugar Free Sugar Substitute 1 94.2

Nutralite Fat Spread 1 40

EverYuth Skincare- Scrub 1 33.6

Skincare-Peel-Off 1 86.0

Skincare-Face Wash 10 1.0

Market Position
• 21% CAGR growth in Net Profit over last 10 years
• 35.8% CAGR growth in Mar Cap over last 10 years
• Company’s earning is expected to grow by 14.9% annually which is away
above the market expectation
• Return on Equity - 20.1% whereas the industries ROE is 9.03%
• Approximately 60x growth in 23 years
• Debt:
• Debt – INR 250 Mn
• Zydus Wellness's level of debt (3.4%) compared to net worth
• Debt is well covered by operating cash flow

Other Financials
• Stock Return:
 ZYDUSWELL outperformed the Food industry which returned -1.6% over the past year.
 ZYDUSWELL outperformed the Market in India which returned -10.2% over the past
year.
• Price Volatilty:
 Beta of ZYDUSWELL – 0.27
 Beta of IN Food Industry – 0.46
• PE ratio:
 PE of ZYDUSWELL – 37.6
 PE of the Industry - 17

Other Financials
Other Financials
• Dividends:
 Company pays a Dividend of 0.6% of current annual income
• Current Payout ratio to Shareholders – 22%
• Dividends paid are well covered by earnings (4.5x coverage).