ICICI Direct: Zydus Wellness - Deleveraging On The Cards, Earnings To Get Boost
Sugar Free brand manufactured by Zydus Wellness Ltd. (image: Company website)

ICICI Direct: Zydus Wellness - Deleveraging On The Cards, Earnings To Get Boost

Bookmark

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Direct Report

Zydus Wellness Ltd. announced a Rs 1100 crore fund raising with Rs 350 crore infusion by promoter and Rs 750 crore by qualified institutional buyer (QIB) placement of equity/equivalent instruments.

We believe the company would utilise funds to repay high cost debt of Rs 1500 crore that was raised at the time of acquisition of the Heinz business.

With equity infusion of Rs 1100 crore, existing cash of Rs 200 crore, FY21 earnings, Zydus Wellness would be able to repay almost entire debt by March 2021. This would result in savings of Rs 140 crore interest cost.

Assuming equity infusion at current price of Rs 1650/share (given promoters have infused Rs 350 crore at Rs 1643/share), the equity dilution would be approximately 12%.

The mere saving of interest cost would increase our FY22 earning per share estimate by 21%.

Click on the attachment to read the full report:

ICICI Direct Zydus Wellness Company Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.