When Zydus Wellness was languishing at Rs. 372 (28.03.2012), S. P. Tulsian gave strong logic to support his thory that Zydus Wellness would touch Rs 500. He pointed out that Zydus Wellness is a Zydus Cadila Group company and they are into the health and life-care segment. Zydus Wellness makes sugar-Free, which is their main product. The share price has in fact corrected maybe in last three months or so. It used to rule at about more than Rs 500. He added that Cadila Healthcare is holding 70-72.50% stake in Zydus Wellness and 18% are with the institutions, 10% with the public float and the financial performance also has been quite robust. The first nine months topline of Rs 250 crore with EPS of close to about Rs 12 and Zydus Wellness has been very prudent in initiating their marketing moves and all that because it is a debt-free company. S.P. Tulsian pointed out that Zydus Wellness is sitting on cash of about Rs 100-110 crore as on December 31. So that cash is largely used to promote or to introduce and to accelerate the presence of the brand or to grab the market share which they have been doing very smartly over the last couple of years and I think the same trend is likely to continue. He said that in FY13 he was expecting Zydus Wellness to be able to post an EPS of close to 80 and “if you see the stock, which traditionally used to enjoy the P/E multiple of more than 20 because of its unique product portfolio, the unique profit margins and all sort of things, I think the stock has very limited downside from hereon since it has already been corrected in last three months or so and if someone can keep a view of about 6-8 months, they can expect a price of about Rs 500.”
Well, happily for S. P. Tulsian, Zydus Wellness has soared to Rs. 427 as of today, giving handsome returns of 15% since that day.
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