Zydus Wellness posts smaller profit margins as costs bite
Net profit for Zydus Wellness rose 9% to Rs 1.45 billion in the January-to-March quarter. However, that was only due to a deferred tax benefit of Rs 189.7 million.
Zydus Wellness said sales rose 11.8% to 7.1 billion rupees, as effective price increases of 7.8% and an improved product mix helped offset inflationary pressures. (Photo: zyduswellness.com) India’s Zydus Wellness Ltd reported a drop in its fourth-quarter profit margins on Wednesday, as higher costs outweighed a rise in sales that was powered by price hikes for products such as Glucon-D energy drinks.
The company’s shares fell nearly 4% after the results.
Net profit for the Ahmedabad, Gujarat-based company rose 9% to 1.45 billion rupees ($17.7 million) in the January-to-March quarter. However, that was only due to a deferred tax benefit of 189.7 million rupees.
Excluding that, the company’s profit before tax dropped 3.9% to 1.26 billion rupees.
Zydus Wellness said sales rose 11.8% to 7.1 billion rupees, as effective price increases of 7.8% and an improved product mix helped offset inflationary pressures.
However, that was more than offset by a 14% jump in total expenses.
Consequently, its profit-before-tax margins fell to 17.8% in the latest quarter from 20.7% a year ago. Its net profit margins also edged lower, to 20.5% from 21%.
Zydus Wellness, in which generic drugmaker Zydus Lifesciences holds a 58% stake, also declared a dividend of 5 rupees per share.
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