Hold Zydus Wellness; target of Rs 1840: Sharekhan
Sharekhan’s research report on Zydus Wellness
The stock price of Zydus Wellness Limited (Zydus) has moved up by ~17% since our last update (dated July 31, 2019). The current valuation at 31.6x its FY2021 earnings is at a premium of ~7% of its historical five-year average of 30x and does not provide much upside from the current level.
Hence, we downgrade our rating on the stock from Buy to Hold with a revised PT of Rs. 1,840. Post the acquisition of Heinz, working capital has remained stable; however, higher debt has put some pressure on the balance sheet.
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