Analysts at Nirmal Bang Institutional Equities say the firm’s performance in the March quarter should be aided by growth in domestic business, and the seasonally strong wellness business.
Though the growth in its wellness business may be lower than normal given the present scenario, its prospects remain strong.
The consumer wellness business, which contributes 13 per cent to revenues and is housed under a separately listed company — Zydus Wellness —is expected to see traction from strong brands such as Sugar Free, Nutralite, and Everyuth, along with Complan, Glucon-D, Nycil.
Analysts expect the wellness segment to deliver double-digit revenue growth, with key brands (like Complan) showing signs of revival.
With liquidity limited in the Zydus Wellness (Cadila holds 63.5 per cent stake) counter, CLSA says Cadila is the recommended way for institutional investors to play the improving consumer business, even as gains from steady growth of its core pharma segment will continue.
Analysts feel the Street is not bullish on the wellness business in Cadila’s overall valuations. Assigning a 20 per cent holding company discount to its wellness business, CLSA had maintained positive outlook for the stock, which is trading at 22x its FY21 estimated earnings.