Mirae Asset Sharekhan maintains its BUY recommendation on Zydus Wellness Limited (ZWL) following the company's strategic acquisition of UK-based Comfort Click Limited for approximately Rs. 2,800 crore. The brokerage has revised its price target upward to Rs. 2,688, citing the deal's potential to accelerate international expansion and strengthen the company's position in the high-growth vitamins, minerals, and supplements segment. Trading at Rs. 2,319, the stock presents compelling value at 36x FY26E earnings, with management projecting cash EPS accretion from the acquisition's first year.

Strategic Acquisition Marks International Expansion Milestone

Zydus Wellness has completed its maiden overseas acquisition, purchasing 100% equity in Comfort Click Limited through its wholly-owned subsidiary Alidac UK Limited. The £239 million transaction represents a calculated 2.0x EV/sales multiple based on CCL's FY25 revenue of Rs. 1,500 crore, establishing ZWL's presence across UK and European markets while providing entry into the lucrative vitamins, minerals, and supplements sector.

The acquisition structure encompasses multiple share classes, with Alidac securing complete ownership of Class A and B ordinary shares, alongside 71.43% of Class C and 66.67% of Class D non-controlling stakes. This comprehensive deal includes CCL's three subsidiaries spanning Ireland, the United States, and India, creating a truly international wellness platform.

Diversified Portfolio Across High-Growth VMS Categories

Comfort Click's portfolio encompasses three distinct brands targeting different market segments. WeightWorld™ leads the adult nutrition space with plant-based supplements, vitamins, minerals, collagen, omega fatty acids, probiotics, micronutrients, and sports nutrition products. Maxmedix™ specializes in specialty VMS gummy formulations addressing pediatric nutritional requirements, while Animigo focuses on natural pet VMS products.

The European VMS market commands an estimated £11 billion valuation, with robust growth prospects driven by increasing health consciousness, preventive healthcare adoption, and expanding e-commerce penetration. CCL's digital-first approach aligns perfectly with these market dynamics, generating majority revenues through e-commerce and direct-to-consumer channels.

Financial Performance Demonstrates Strong Growth Trajectory

Comfort Click has delivered exceptional compound annual growth of 57% over the past five years, earning recognition as one of Europe's top 1,000 fastest-growing companies by the Financial Times in both 2024 and 2025. The company reported adjusted operating profit of £21 million for FY25, achieving impressive margins of 15.6% that exceed ZWL's current 14% operating margin.

Synergistic Opportunities Across Geographic Markets

The acquisition creates multiple cross-pollination opportunities between ZWL's established Indian operations and CCL's European expertise. ZWL gains immediate access to UK and US markets for its existing product portfolio, while CCL's proven VMS formulations present significant potential for introduction into India's rapidly expanding wellness market.

The complementary geographic footprint eliminates overlap concerns while maximizing market penetration opportunities. CCL's digital-native approach provides ZWL with advanced e-commerce capabilities and direct-to-consumer expertise, essential for competing in modern wellness markets where online channels increasingly dominate consumer behavior.

Robust Growth Projections Support Premium Valuation

Mirae Asset Sharekhan projects compelling financial performance with revenue and profit after tax expected to achieve compound annual growth rates of 12% and 20%, respectively, during FY25-FY27E. Management expresses confidence in delivering double-digit revenue growth alongside margin improvement in FY26, supported by distribution expansion, consumer-centric innovation, and enhanced marketing campaigns.

The brokerage's revised price target of Rs. 2,688 reflects improved valuation prospects stemming from international market presence and enhanced growth visibility. Current trading multiples of 36x/30x for FY26E/FY27E earnings appear reasonable considering the company's strengthened global positioning and diversified revenue streams.

Risk Factors Warrant Careful Monitoring

Several headwinds could impact the investment thesis, primarily centered around ZWL's exposure to discretionary wellness categories susceptible to macroeconomic volatility. Seasonal demand variations and consumer sentiment shifts represent ongoing challenges requiring management attention.

Competition from multinational corporations in skincare segments, particularly face wash and scrub categories, continues pressuring certain product lines. Additionally, successful integration of CCL's operations while maintaining growth momentum will test management's execution capabilities across diverse geographic markets.

Investment Outlook Remains Constructive

The Comfort Click acquisition represents a transformative milestone for Zydus Wellness, establishing meaningful international presence while diversifying into high-growth VMS categories. With attractive deal valuation, strong financial projections, and clear synergistic opportunities, the transaction positions ZWL for sustained outperformance.

Target Price: Rs. 2,688 | Current Price: Rs. 2,319 | Recommendation: BUY

The combination of established domestic leadership, expanding international footprint, and entry into complementary wellness segments creates a compelling investment proposition. Investors seeking exposure to India's evolving wellness landscape with international diversification should consider accumulating positions on market weakness, with the revised target offering meaningful upside potential from current levels.