Trendline Breakout - ZyduswellTechnical Analysis:
Current Price: ₹1970
Trendline Breakout Pattern: This is a strong bullish technical signal, indicating that the stock has potentially moved past a resistance level and is poised for an upward move. Confirmation would ideally come with increased trading volume.
Target 1: ₹2100
Target 2: ₹2500
Target 3: ₹3000
Time Frame:
1st & 2nd targets: 1 to 3 months
3rd target: 6 months to 1 year
Potential Upside from Current Price (₹1970):
Target 1 (₹2100): ~6.6% upside
Target 2 (₹2500): ~26.9% upside
Target 3 (₹3000): ~52.3% upside
Fundamental Analysis :
Market Cap: ₹12,541 Cr.
Stock P/E: 36.8 (Higher than the Industry P/E, indicating a premium valuation)
Face Value: ₹10.0
Industry P/E: 30.9
Key Fundamental Observations:
Valuation: The P/E of 36.8 is higher than the industry P/E of 30.9, implying that the market is already factoring in future growth. The current price is also well above its Intrinsic Value and Graham Number.
Profitability: The profit growth of 22.3% is robust and a positive sign.
Earnings Consistency: The EPS of ₹54.5 for the "last year" matching the current EPS, and the "EPS preceding year" being ₹41.9, suggests healthy year-on-year growth. The latest quarter's EPS (₹27.0) is very strong, indicating a significant recent boost in earnings compared to the previous quarter (₹1.01). This strong quarterly performance is likely driving recent optimism.
Financial Health: Low Debt to Equity (0.03) indicates very strong financial health.
Corporate Action (Based on recent public information, not in the image):
Stock Split: Zydus Wellness announced a stock split in a 1:5 ratio (face value ₹10 to ₹2). This is typically done to enhance liquidity and make shares more accessible. This is subject to shareholder approval at the upcoming AGM (scheduled for July 30, 2025).
Dividend: The board has recommended a final dividend of ₹6 per equity share of ₹10 face value for FY25, subject to shareholder approval.
Latest News (as of May 21, 2025):
The primary recent news for Zydus Wellness revolves around its strong Q4 FY25 financial results, where it reported a significant increase in net profit and revenue from operations. The impressive jump in EPS for the latest quarter (₹27.0 from ₹1.01 previous quarter) is a key highlight.
The announcement of the stock split and dividend recommendation also contributes positively to recent news flow and investor sentiment.
There's also news about the company unveiling a refreshed corporate brand identity, signaling strategic moves in its market positioning.
Conclusion:
The technical Trendline Breakout for Zydus Wellness appears to be strongly supported by its recent robust financial performance, particularly the impressive EPS jump in the latest quarter and a healthy profit growth of 22.3%. The company's low debt is also a significant positive.
While the stock is trading at a premium P/E (36.8 vs industry 30.9) and above its intrinsic value, the strong recent growth and positive corporate actions (stock split, dividend) could justify this valuation for investors anticipating continued strong performance.
The targets of ₹2100 / ₹2500 within 1-3 months and ₹3000 within 6 months to 1 year seem plausible if the fundamental growth momentum continues and the technical breakout holds with good volume.
