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Zota Health Care Ltd
NSE: ZOTA INE358U01012 Healthcare Pharma 🔎 Screen
₹4,245 Cr
Market Cap
P/E
PEG
-8.5%
ROCE
-15.0%
ROE
0.39
D/E
3.3%
OPM
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📈 Price History
Ratio Health
Excellent
Good
Average
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By Category
Shareholding
About

Zota Health Care Limited is a renowned pharmaceutical company that manufactures, markets, and exports pharmaceutical, ayurvedic, nutraceutical, and over-the-counter (OTC) products across boundaries into the semi-regulated and regulated markets of Asian Countries markets of African Countries, Russian Countries & Latin America.

✓ Strengths 1
  • Company is expected to give good quarter
! Concerns 4
  • Stock is trading at 5.62 times its book value
  • Company has low interest coverage ratio.
  • Promoter holding has decreased over last quarter: -1.25%
  • Company has a low return on equity of -19.9% over last 3 years.
Key Ratios Snapshot
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📈 Growth Pattern
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Strong quarter: Revenue growth sustained, positive EBITDA achieved for full year, Q4 EBITDA margin improved to 7.3%. quarter Investor Presentation One-Pager? Mar 2026
Revenue (Q4 est.)
₹163.1 Cr
Derived from Q4 EBITDA of ₹11.9 Cr at 7.3% margin; FY26 full year ₹538.7 Cr (+84% YoY)
EBITDA Margin (Q4)
7.3%
vs FY26 full year 4.8%; sequential and YoY improvement
Davaindia Stores
2,579
COCO 1,656 + FOFO 923; added 248 stores in Q4
What Went Right
  • Consolidated revenue grew 84% YoY to ₹538.7 Cr in FY26, driven by Davaindia doubling to ₹417.4 Cr.
  • Gross margin expanded 714 bps YoY to 60.3% in FY26, supported by private-label-led model.
  • EBITDA turned positive in FY26 at ₹25.97 Cr (4.8% margin); Q4 EBITDA was ₹11.9 Cr (7.3% margin).
  • Added 997 stores in FY26 (highest ever in pharma retail), with Q4 adding 248 (218 COCO, 30 FOFO).
  • Same-store sales growth (SSG) of mature stores (24+ months) at 35-40% in FY26; 12-24 month cohort SSG at 55-60%.
What to Watch
  • Average GMV per store was flattish due to heavy new store additions, though mature stores saw healthy growth.
  • Marketing spend rose to ~₹18 Cr in FY26 (from ₹10.5 Cr) though proportional to sales; visibility with brand ambassadors not yet maximized.
  • Management plans to moderate store openings in Q2 and Q3 FY27 to focus on store-level profitability – acknowledging current profitability not optimal.
  • Payable days reduced due to MSME payment compliance, potentially impacting working capital flexibility.
  • Intangible assets under development rose to ₹14 Cr, primarily pre-opening costs for new stores – a drag on near-term cash flows.
Management Guidance
  • Target 500-700 new stores in FY27, with intentional moderation in Q2-Q3 to improve profitability, then ramp up in Q3-Q4.
  • Long-term vision: scale to 5,000+ Davaindia stores by FY29.
  • COCO stores expected to constitute 80-90% of new additions (~500+ COCO, 100-150 FOFO in FY27).
Investor Lens
The thesis remains intact: Zota is proving its integrated model with 84% revenue growth and positive EBITDA. Gross margins are structurally high (60%+) and same-store growth is robust at 24-40% depending on vintage. The key caveat is that aggressive expansion has not yet translated to strong store-level profitability, hence management's deliberate slowdown in FY27 H1 to fix unit economics. Watch for Q1 FY27 same-store growth and whether new store productivity improves. Also monitor marketing ROI as brand ambassador costs scale. If profitability improves as guided, the 5,000-store target by FY29 looks achievable; if not, margin pressure could persist.
From investor presentation · AI-generated analysis · Not investment advice
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📉 WEAK Revenue jumps 68% YoY to ₹163 Cr, but net loss widens to ₹14 Cr.
Revenue
Revenue grew 68% YoY to ₹163 Cr, with a sequential growth of 14% QoQ. Strong top-line momentum driven by healthcare demand.
Profitability
Net loss widened YoY to ₹14 Cr from ₹13 Cr, but improved 53.3% QoQ. EPS stood at -₹4.09 (vs -₹4.50 last year). High depreciation of ₹27 Cr and negative other income of -₹3 Cr weighed on bottom line.
Margins
Operating profit margin improved to 5% from 3% YoY, but was flat QoQ. High interest cost (₹5 Cr) and depreciation kept margins thin, indicating weak operating leverage.
Cash Flow
Data not available in report.
Balance Sheet
Borrowings stood at ₹270 Cr against reserves of ₹659 Cr, with a debt/equity ratio of 0.57. Total assets of ₹1,131 Cr and negative ROE of -36% reflect persistent losses.
Key Risks
Persistent net losses and high depreciation (₹27 Cr) signal an asset-heavy model with low returns. Negative other income and negative ROCE (-17%) highlight capital inefficiency.
Outlook
Revenue growth trajectory remains strong, but profitability improvement is critical to turn positive. High depreciation will continue to drag earnings until scale improves.
Generated by AI · Mar 2026 results · Not investment advice
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