Zydus Wellness Q3 Results: Nearly 2x jump in expenses lead to net loss but margins expand

Zydus Wellness Ltd. reported a net loss during the December quarter compared to a net profit last year, its numbers released on Tuesday, February 3 showed.

The company reported a net loss of ₹40 crore compared to a net profit of ₹6.4 crore during the same quarter last year. There was a near two-fold jump in its total expenses, which stood at ₹1,000 crore from ₹455 crore last year. Advertising and promotion expenses nearly tripled from last year, as did the other expenses. The company also had a one-time impact worth ₹6.6 crore due to the new labour code.

Other parameters of the company though were better from last year. Revenue increased to ₹965 crore from ₹462 crore during the same quarter last year, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) saw a four-fold jump to ₹61 crore from ₹15 crore last year.

EBITDA margin for the quarter expanded by over 300 basis points to 6.3% from 3.2% last year.

In its post earnings release, the company stated that Sugar Free strengthened its leadership in the sugar substitute category with a market share of 96.3%, growing 80 basis points from the same quarter last year.

Shares of Zydus Wellness are currently trading 3.5% lower after the results announcement at ₹419.1. The stock is up 13% over the last 12 months.