Zydus Wellness Ltd (NSE: ZYDUSWELL) Q4 2025 Earnings Call dated May. 19, 2025
Corporate Participants:
Unidentified Speaker
Sharvil P. Patel — Non-Executive Chairman
Tarun Arora — Chief Executive Officer and Whole Time Director
Umesh V Parikh — Chief Financial Officer
Analysts:
Unidentified Participant
Dhiraj Mistry — Analyst
Tejas Shah — Analyst
Kinjal Mota — Analyst
Mayur Parkeria — Analyst
Madhur Rathi — Analyst
Umang Shah — Analyst
Agam Shah — Analyst
Presentation:
operator
SA Sam Foreign. Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Zydus Wellness Limited hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Dheeraj Mistry from ICICI Securities. Thank you and over to you sir.
Dhiraj Mistry — Analyst
Thank you and good evening to everyone. I would like to thank the management of Zaidus Wellness to give this opportunity to host this call. We have with us Dr. Sharville Patel Chairman, Mr. Tarun Arora CEO, Mr. Ganesh Nayak, Director and Mr. Umesh Parikh, CFO.
I would like to call I would like to hand over the call to the management for their opening remarks. Thank you.
Sharvil P. Patel — Non-Executive Chairman
Thank you. Good evening and welcome to the post results teleconference of Zidus Finance Limited for Quarter 4 financial year 2024 25. Like mentioned earlier, I have with me Dr. Shawal Patel, Chairman, Mr. Ganesh Naik, Director and Mr. Omesh Parikh, CFO on the call during the quarter, while the overall FMCG demand remains stable, several categories exhibited notable growth reflecting positive consumer traction and evolving preferences. Consumption trend overview indicates that rural markets continue to outperform urban areas buoyed by stronger consumer sentiment. This momentum is reflected in the robust growth of smaller unit packs indicating increased accessibility and consumption at the grassroots levels.
At the same time, the trend towards premiumization remains strong across geographies. Digital commerce continues its rapid expansion. Quick commerce is accelerating instant small basket purchases in metropolitan areas while marketplaces are deepening their reach into smaller towns supported by rising digital adoption and increasing appetite for premium offerings. On the macroeconomic front, easing food inflation is contributing to a decline in overall inflation, though volatility in edible oil prices and dextrose monohydrate remains a key concern. The company recorded its consolidated net sales growth of 17% reaching 9,106 million rupees, accompanied by a volume growth of 13% on a year on year basis.
For the quarter. For the year 2025 financial year 2025, the company achieved growth of 16.2% with a volume growth of 12.4% amounting to 26,912 million rupees, resulting in a healthy CAGR of about 10% in revenue from operations based on the FY21 base. The personal care segment continued to demonstrate strong consumer traction, achieving notable double digit growth of 22.5% for the quarter along with 33.4% growth for financial year 2025. This sustained momentum highlights the segment’s resilience and brand strength, giving a robust CAGR of 16.5% from our FY21 base. Concurrently, the food and nutrition segment maintained its upward trajectory suggesting a solid quarterly growth of 15.4% along with 13% growth for financial year 2025 fueled by category expansion, product innovation and strategic acquisitions.
This translated into a consistent CAGR of about 8.5% from FY21 base, reinforcing segment’s long term growth potential. Organized trade saliency continued to improve reaching 23% for financial year 2025. Of this E commerce contributed 10% and Montrade contributed 13%. Quick commerce now accounts for 41% of total E Commerce, benefiting from a lower cost to serve compared to overall E Commerce. As per Met March 2025, Nielsen and Kantar World Panel household data reported that the overall FMCG market in India, both urban plus rural, grew by 9% in value, 6% in volume and at an overall level saw a 3% increase in household penetration while Zitis Wellness outperformed all these parameters, primarily driven by rural markets where it was higher while urban also contributed well on this platform.
Let me give you an example the overall you know the household penetration for Zydus Wellness Group almost four times that of the market average, reflecting the strong brand equity, expanding reach and strong resonance across households. We continue to drive innovation by leveraging company’s strong research and development capabilities, while a comprehensive list of launches and extensions for FY25 is available on our website. This quarter saw Eveyudh Brand entering sheet mask category with the launch of three exciting variants, Golden Glow, Anti Pollution and Aloe Cucumber. Gross margins have demonstrated stability with modest upward trend in a year to year comparison despite ongoing inflationary challenges.
The performance is a result of prudent strategic hedging, favorable product mix and a calibrated pricing strategy. Consequently, we have seen consistent margin expansion to net sales across all quarter on year on year basis, delivering 42 basis points in the quarter, 168 basis points for the year and a total of 361 basis points over two years, financial year 24 and financial year 25. These results further strengthen our confidence in the effectiveness of our plans and actions. On the EBITDA front, the company delivered a growth of 17.1% reaching 1900 million rupees for the quarter while net profit after tax increased 14.4% to 1,719 million rupees.
For the financial year 2025, EBITDA grew by 23.2% closing the year to 3,797 million rupees and net profit excluding exceptional item and one time deferred tax assets rose by 30% to 3,410 million rupees. Additionally, reported net profit as a percentage of revenue from operations improved by 1.3% on a year on year basis. Earning per share also registered a strong growth from 41.94 to 54.52 in financial year 2025. We remain focused on consistently enhancing shareholder value. In line with this, the Board has recommended a final dividend of rupees 6 per equity share of face value rupees 10 which is 60% representing a 20% increase over the dividend declared in the previous financial year.
The Board has also recommended a stock split in the ratio of 1:5 reducing the face value of rupees 10 to 2 to improve share accessibility. Both proposals are subject to shareholder approval at the upcoming agm. The Company’s share sorry Company’s cash conversion from operations at Rupees 3800 million to EBITDA of 3797 million rupees reflect a strong realization of 100%, demonstrating its ability to effectively support growth initiatives, maintain financial flexibility and reinforce its commitment to disciplined capital allocation alongside financial performance. The Company recognizes its responsibility towards environmental, social and governance factors. As a result, our recent ESG publication and SNP Global rating for FY24 reflect a significant increase of 36.2% reaching ESG score of 79.
Notably, we have secured 99 percentile amongst 390 companies in our peer group with a 96% disclosure rate covering both required and additional disclosures. With that, let me share some of the highlights of the operations for the year gone by which will also cover category growth Market share numbers as per MATMarch 2025 report of Nielsen and IQVR. On the personal care front, EV youth continues to outperform the category delivering strong and consistent performance. The Face Scrub category grew by 20% at MAT level. AVI Youth Scrub maintained its leadership position with 48.5% market share marking a remarkable increase of 321.4 basis points over the same period.
Last year the Peel off category grew by 24% at the mat level. Every Youth Peel off remains the market leader with 77.7% market share reflecting a 6.1 basis point gain over the previous year. EV youth brand holds the fifth position in the overall facial cleansing segment holding 7.7% market share. Nicel outperformed category growth continuing its strong and consistent performance. The Prickly Heat powder category grew by 21% at MAT level. Nicel has maintained its number one position with a market share of 33.8% on the Glucondy front. Glucondy maintained its leadership in the glucose powder category with a market share of 58.8% at the MAT level.
The glucose powder category grew by 19.7% at the mat level reflecting a continued consumer demand and regional relevance. The nutritional drink category has reported a decline of 2.1% at a MAT level with a continued softness across key metrics. Brand currently holds a market share of 4.0% at the MAT level. On the sweeteners brand, Sugar Free Brand continues to maintain its dominant position holding a commanding 95.9% market share in the sugar substitute category which has grown by 6.7% at our MIT level. Sugar Free Green is delivering strong double digit growth fueled by rising consumer demand and increased volume uptake over the last several quarters.
During the year, Company extended Sugar Free Delight cookies through organized channels in the domestic market receiving favorable consumer feedback. Imlight, a low calorie sugars alternative blended with stevia continues to receive positive market feedback showcasing stock consumer adoption and potential for future growth. On the Nutrilite front, continuously expanding and diversifying the product portfolio delivering double digit growth with a 5 year CAGR supported by consistent volume growth in a wide ranging product portfolio. Growth driven by dedicated B2B and B2C teams ensuring sustained demand across multiple channels on the new business of Rite byte following the 100% acquisition of Natural India Private Limited in the later part of the previous quarter, the business is performing as expected.
The integration and digitalization transformation are progressing smoothly and with the business continuing to deliver strong growth across its product portfolio, operational and strategic initiatives are on track, further reinforcing confidence in the long term potential of the acquisition. We remain committed to improving margins and profitability in the coming quarters.
Thank you and we will now begin the Q and A over to the Coordinator.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Queue assembles. The first question is from the line of Tejas Shah from Evandesk Park. Please go ahead.
Tejas Shah
Hi sir, thanks for the opportunity. My first question is actually the first couple of questions are around the quarterly numbers. So how did the organic volume and value growth trend this quarter? And employee cost seems to have some inflation in this quarter. So any one off or should we consider this as a new run rate?
Sharvil P. Patel
Thank you, Tejas. First, I think comparable base business growth is low double digits. So we continue on our double digit trajectory on a business as is and reflected in mid to high volume growth, single digit volume growth. So it’s backed by a consistent volume growth as well. The employee spends growth is driven by a couple of factors. One of course is the fact that we have variable pay part of the cost structure and there has been a good performance which we have to do. Secondly, there is a higher cost of people because the, you know, the entire team of the acquired business is on payroll.
Some of the, where we. Yeah, the last mile sales which typically most FMCGs work on a third party payroll or a distributor payroll. So therefore there’s a slightly higher percentage cost which will, you know. Therefore there is a disproportionate increase in the base. But going forward I think there should be some moderation. But this is the kind of, this is the broad reason.
Tejas Shah
Very clear sir. EBITDA margins on annual basis have improved after a gap of four years on yoy basis. So first of all congrats for that. But is there a sustainable shift here or any guidance would you like to call out at this point?
Sharvil P. Patel
So Tejas, I think we’ve been maintaining our clear intent is to move this numbers to 1718% in next couple of years. Most of our actions are in this space where we are strongly driving starting with our gross margins to stay positive. So basis of some gross margin which is going back into investing for the brand and growth. Rest of that we’ll take it to EBITDA and we’ll also hope that with this growth momentum we can also get some operating leverage. So we do believe that structurally we want to drive the EBITDA back to high levels that we missed over last three, four years.
Tejas Shah
And the last one, if I may, on a consistent basis. Yeah, yeah. So last one if I may squeeze in on quick commerce. You made a very strong remark on that. That channel is doing fabulously well. So is it helping us to premiumize and reach new consumers which we are not catering before or is it largely serving the existing customers through a new channel?
Sharvil P. Patel
I Think it’s a bit of both because quick commerce increases accessibility in the urban space. Top 1015 towns, top 1012 towns is where the max impact you find and it increases the accessibility because distribution, however good it may be, has its own nuances, has its own challenges. So it obviously helps democratize better and therefore able to reach some new consumers. We are finding at least few of our new spaces that we’ve got ourselves. We get much better faster response in Quick Commerce. The challenges of the limited availability of retail self is overcome by this. So it’s doing both.
It is obviously replacing some of the existing spaces but it is also helping us reach out to new set of consumers.
Tejas Shah
Is there any brand which is over indexed on growth in this channel?
Sharvil P. Patel
There are two or three brands which we believe is doing very well. But let me give you one example which stands out to my mind is that one is compliant. We find online and quick commerce has a higher than company index. Even a cold chain product like a butter does exceedingly well in this than in retail. So clearly some of these brands do find good traction with this.
Tejas Shah
That’s all from my side and sir, all the best for coming quarters.
operator
Thank you. We’ll take our next question from the line of Kinjal Mota from Banyan Banyan Tree Advisors. Please go ahead.
Kinjal Mota
Hi. Thank you for the opportunity. My question is on ride by acquisition that we did. If you can give any comments on what is the kind of growth that growth that the brand saw in FY25 and moving forward what is the kind of growth and margins that we could expect from that bite coming off.
Sharvil P. Patel
So while we don’t share exact but we can tell you right now because it’s going to be to give you a flavor of it, the business has been only for about four months with us. We’ve seen higher than 50% growth on this brand supported by tailwinds and a lot of good execution by the team. The margins have been positive, low single digits and we hope to build on this as we go along with operating leverage and synergy benefits coming.
Kinjal Mota
Sure, sure. So moving ahead can we what could be the sustainable growth that we expect in next three years or so? If you could comment on that.
Sharvil P. Patel
I think it’s early days because we do believe there is a very high growth. Something we mentioned at the time of acquisition. Also that over last three to five years the business has done about 25% plus as a CAGR. We hope to continue doing that. Right now we are tracking reasonably well on that.
Kinjal Mota
Sure, sure. Thank you. Thank you. That’s also my end. Best of luck.
operator
Thank you. The next question is from the line of Mayur from wealth Manager. Please go ahead.
Mayur Parkeria
Good evening sir and thank you for taking my questions. Am I audible? I am little under the weather so apologies for my voice.
Dhiraj Mistry
Yes, you’re audible.
Mayur Parkeria
Just a couple of questions from a seasonality perspective. Now for us as a company overall this Q4 and then the upcoming Q1 is the Lion’s share. Now I understand it’s a very short duration of quarter but it’s an important season because it’s almost a reflection of the entire coming year. So in the early early January we saw south and east summer were not so strong. It was much milder compared to previous trends. And then lately we have also seen west early monsoons and things like that. And then on the other side the previous year we have seen phenomenal growth which was there in the two quarters.
So the base to that extent is larger. Would you like to call out something on that? And how do you see the current quarter going by since we’re already almost close to one and a half months going by and the inventory channel for some of our products, main products especially for Q1 and how does that pan out and impact the margins overall?
Sharvil P. Patel
Sir, thank you Mayur for detailing it out but we do not give forward guidance so will not be able to comment specifically.
Mayur Parkeria
Some qualitative understanding of how is the market shaping up broadly because it’s a very important understanding. I’m sure you will appreciate all investors understanding on that and it’s been a, you know, sometime since, you know, we have seen such good improvements. So we would like to understand if it is possible, you know, some trajectory, some color, whatever you feel comfortable, not numbers, not but how qualitatively you see, you know, growth co panning out and how do you see the, you know, FY26, if at all broadly.
Sharvil P. Patel
So I think let me just give you just a little bit of qualitative view. First of all I think it’s just two months and we have the full year and yes, quarter four, quarter one are the most crucial ones and quarter four is far away. Quarter one, some markets have got affected but we do believe that we are working our way to ensure commitment to our double digit remains on track. So that’s really what I would say everyone’s seeing what you’ve seen in terms of some markets getting impacted. Some of them are crucial markets for us but we’re working on solving for those by given our portfolio and opportunities we have to double down on markets where there’s still positivity.
Mayur Parkeria
Okay. Just a small extension in a different way just to understand sir, especially for glucon d and N is that what kind of percentage kind of demand broadly is non seasonal. Because while these are seasonal products we understand but there is a base demand also and these are products which are consumed broadly throughout and different places geography. India is a very tropical. So from that perspective, just you know some broad understanding. Will, will it be fair to say that 20, 25% of these products are consumed throughout the year? Or is it they are, you know.
Or is the skewness much larger? Some, some, some, some way to understand the season. These two which are, you know, which are heavy quarters for us, which are heavy products in the quarter for these two products.
Sharvil P. Patel
QNES is much larger. So only 10 15% of these products sell in the quarter to quarter three.
Mayur Parkeria
Okay. Quarter two, quarter three. Okay. Okay. That’s it from my side sir. Thank you and wish you all the best.
Sharvil P. Patel
Thank you.
operator
Thank you. Participants, in order to ask a question please press star and one. Now the next question is from the line of Madhur Rathi from Countercyclic Investments. Please go ahead.
Madhur Rathi
Sir. Thank you for the opportunity. Sir, I wanted to understand regarding our right by acquisition and the capital allocation policy regarding that. So if I consider the comp plan and Glucondy the brand that we bought for 4600 crores in FY in FY19 so that has incrementally added only hundred to 150 crores in our pvt. So sir, that is less than 3% yield if I can understand. And that, that too after four or five years. Because I’m trying to understand some kind of valuation multiple that you did for right bite. And so how are the valuation policy changed in acquiring different businesses post this kind of a disaster that we had for complan where considering inflation it’s even lower the incremental PBT that we have added.
Sharvil P. Patel
First of all your assessment on the other acquisition is not accurate but we let that be. We’ll focus our answer on nipl on the valuation piece. I’ll let Omesh answer that.
Umesh V Parikh
Yeah, so we, you know we actually. Do due diligence and you know value. The company using multiple parameters and methods. So also you know the latest one that we use is the market benchmark of the recent acquisition. So based on that, you know, because generally startup which are growing at a high speed, there is a likelihood that there is hardly any operating margin there. But we were, I think it’s a good Acquisition because when we acquired it was almost out to break even.
So you know, in terms of the sales multiple it was about, you know, three times of sales multiple FY24. And that we thought is really a good price to pay and that’s what we have been currently also realizing that the kind of growth that we have been getting through this acquisition and the operating margin we have, it has become positive over last four months and we.
Expect it to be FY26 cash EPS. Yes, it’s going to be if it runs the same way and we are hopeful it’s going to be EPS accretive by 2026.
Madhur Rathi
Got it. So if I, if, if I look at our company. Sir. Company. So the main strategy that we are following is acquiring brands and dominantly market leaders in smaller segments and growing them out. So going forward is there a certain criteria like IRR or a payback period we would expect before doing any of these internal acquisitions going forward?
Sharvil P. Patel
So we can discuss in more detail but we do follow a detailed discounting method and for valuation.
Madhur Rathi
Got it. So those are the questions from my end. So thank you so much and all the questions.
operator
Thank you. We’ll take our next question from the line of Omang Shah from Banyan Tree Advisors. Please go ahead.
Umang Shah
Hi sir. Thank you for the opportunity. Sir, first question was how is the response to our new launches especially in adult nutrition in Complan and activators in Glucondi.
Sharvil P. Patel
So I think activewards we’ve got Glucondi Active awards, we’ve got a reasonably good response. It’s in line with the numbers we’ve set internally. So we’re satisfied with the direction which it is building up. It’s small but it is meeting all the milestones. On the adult nutrition vmax we’ve got a fairly good response. The market is sluggish but we are quite hopeful to build on it and it’s a long haul because these brands we’ve taken a route of expert marketing which is we are only detailing to doctors and a little bit of digital. So it will be a slow burn.
But that also looks to be on track on most of the feedbacks that we’ve got so early days but very important for us to build on the new products that we’ve started off.
Umang Shah
Right sir. Right sir. And sir. So of the 6,900 crore category of nutrition drink, how much would be adult nutrition? Any idea?
Sharvil P. Patel
It will be, I think if I remember the numbers right about 20%.
Umang Shah
And we would like to index our presence here as Much as we have in children nutrition. Right.
Sharvil P. Patel
At least that. Our wish list is that. At least that. Maybe more. But we’ll get there. First we have to get our fair share.
Umang Shah
Sure. Sir, answer in facial cleansing segment. It’s only last two. We’ve been present in this segment through Scrub and pre law since many years now, but it’s only last two years that we see a slew of launches in segments like facial masks and face wash, the anti pollution, anti tan range, etc. So sir, what gives us this confidence right now to enter into this category in such an aggressive way considering the fact that we are number five in this market.
Sharvil P. Patel
So the good news is we were number seven in overall patient cleansing. We’ve reached number five and we are growing our market share. The growth on this brand is coming from the core which is led by Scrubs and Peel Off. We launched tan removal in 2018. If I remember right, we had very good response During COVID so 2022 we had some drops but we have recovered and we are building it back. And we’ve also been in the process of launching more products. So we’ve seen the activity levels for us has gone up in between. We also launched, which you probably missed, the body lotion.
So we’ve had every one or two years a launch. Some of them have had fairly good success and each one of them have contributed to the revenue. So we are quite positive about playing a larger, you know, role in skin care led by more facial cleansing, but in other parts of the skin care through this brand.
Umang Shah
Right, sir. Great, sir. And sir, last question, if I may add. How are we positioning IAM Light Sugar in the market and what has been the feedback so far?
Sharvil P. Patel
So IM Lite was launched only last year because we had the earlier brand Sugarlight which got into trademark issues. So we are almost recovering, we are still a little behind, but most of the critical markets we have started recovering whatever we had on the earlier brand that we had built over four years, we started recovering closer to those numbers in key markets and key platforms. Not fully there in couple of them, but some markets, some channels, we’ve already recovered those numbers so at a higher price. So we are quite positive that in another six, eight months we should be beyond the past and building forward on it.
The proposition we believe is still weighing. So we obviously believe most of our brand and this is practically while it’s in the sweetness platform, it’s a brand on its own. Right. Should be sizable, at least three figures eventually. So it’s a journey which we are Doing so first let it cross those milestones and then eventually it should have a three figure number which is necessary for it to be so. At least 15, 20% of the overall sweetness portfolio should come from this brand eventually.
Umang Shah
Great, sir, thank you so much and all the best.
operator
Thank you. Participants who wish to ask questions may press Star one at this time. The next question is from the line of Lokesh Gusen from BOP Capital Markets. Please go ahead.
Unidentified Participant
Hi, thanks for taking the question. So it’s around your margin guidance. So 17 to 18% over the next two to three years. I’m assuming FY27 to FY28. I wanted to understand the drivers for that because in the current inflationary environment, commodities have obviously gone up quite a bit and that’s probably a base as well. Your gross margin expansion slowed down to about 25, 30 basis points points in the fourth quarter. So while I understand percentage margins is a target, but maybe at this time it’s more about offsetting inflation like just the rupee inflation rather than restoring percentage margins.
So is there any revision required in the percentage margin guidance that is 17 to 18% right now, which was called out before this phase of inflation, I guess.
Sharvil P. Patel
Look, I would say this is a business objective that we have taken because we believe to even invest back in the business we need to make it profitable and therefore we will. We are looking to 17, 18% as a journey. We do recognize that there will be ups and downs, there will be inflationary points. It’s been a volatile market. We have seen last year the oil prices shooting up substantially which are cooling down right now. And we’ve been able to pass in steps as a following measures on those costs. Now the milk is going up in recent few weeks we’ve seen.
So some of these parts are part of life and part of doing business. We are quite conscious of the fact that we intend to get there. We will therefore use our pricing power, mix of cost management actions to keep on the journey of gross margin improvement, which still has scope for another couple of points percentage point improvement over next couple of years and remaining has to be a bit of operating leverage to get there. That’s how I would look at it. But I can’t tie myself and say this is exactly what it is and I’ll change my guidance every time I face pressure.
This is the intent and our action is going to be guided by this intent. But we will not compromise short term, we will not compromise on the growth action. So you’ve seen part of our gross margins being invested in the growth as well through marketing activity. So that’s a broad way we are envisaging our business to build up.
Unidentified Participant
Got it. And then just to follow up on that first, corporating leverage. So wanted to clarify if you’re going to maintain the ANP to sales ratio going forward since these are good categories. And secondly, are you assuming any certain level of commodity inflation when you’re looking at a couple of percentage points improvement in your gross margins? I know there could be quarter to quarter fluctuations because palm oil was up quite a bit December quarter and in March as well, but then cooling down. So there would be that volatility. But then you must be building in some level of commodity inflation to come up with the 200 basis points improvement that you’re looking for in gross margins.
Sharvil P. Patel
So I think it’s a mix of product mix portfolio that we want to drive as an agenda. Second is large part of our business, we being the leaders, we are able to pass on the prices. So we do believe with the lag maybe we should be able to pass on the prices. The past challenges we faced between FY21 and 23 which led to a large drop in gross margins which we faced was a global issue where the commodity cycle was globally badly impacted, which impacted our ability to price up disproportionately at the pace it went through.
Going forward, we do believe better product mix. Catching up on the commodity inflation should help us move this up. But any specifics will have to be dealt quarter to quarter. I don’t, I can’t give you more detail than that today, but we do believe there is some improvement, some room for us to keep building further on that, especially for our top brands.
Unidentified Participant
And. The ANP Bill.
Sharvil P. Patel
A and P, I think we’ve started hitting closer to our wish list percentage to sales. Maybe there is room for another half or 1% improvement, but that will play by the year essentially because it will be led by initiatives and what growth we can handle. So I think we typically want to operate closer to a 13% plus, minus half a percent as a way to build our business.
Unidentified Participant
Got it. Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star one to ask a question. The next question is from the line of Agam Shah, an individual investor. Please go ahead.
Agam Shah
Yeah, so quick question. So the two things, depreciation has increased. And employee count has also increased. So I missed your year remark on that. So if you can elaborate on that and broadly or qualitatively or maybe quantitatively Whichever way you want to answer. So where are we seeing, you know, vision scale? Maybe let’s say 2030 or 2028 as a company whole. Thanks. These are my two questions.
Tarun Arora
So on depreciation, because you know, on a console level we are depreciating the brand acquired brand and from nipl right by 10 mix protein for a period of 15 years. So that has led to the increase in depreciation in the brand. And about the second question, can you please repeat the question?
Agam Shah
Because on the employee, employees. On the employee cost.
Tarun Arora
Employee cost has already been answered. But you know, if you have to tell that of the acquired entities of the employee costs have been part of our regular payroll and generally, you know, such kind of field force employee costs go and sit in the other expenses and not part of the employee cost.
Agam Shah
Okay. And my second question was. So in terms of FY28 or 530, if you can broadly talk on your terms of vision, where, where do we see the company heading towards as an organization of whatever you can comment quantitatively. Or qualitatively.
Sharvil P. Patel
As a company? I think there are two or three things that we would like to see over next three to four years. I think first qualitatively we want to strengthen and broad based our consumer franchise. We are market leader and therefore we want to play a significant role in category development. And therefore you would find our presentations reflecting our intent to increase the penetration level. So we want more consumers to come in the fold of these categories. And we being market leaders are playing the category development role. So we want to be a stronger, larger, science based, high performing product business with credible evidence of performance in two spaces.
One is food and nutrition which can build around. One is nutrition which is like macronutrients, like protein, micronutrients, could be vitamins, probiotics, several other factors. The other is of course calorie management which is cutting calories through sweeteners or high calories through energy products that we have. Food and nutrition is a very critical base which we expect an expansion on. We also want to expand our portfolio around personal care where we are looking at both facial cleansing and eventual larger play in skin care through EviYouth as well as the prickly heat and its extension through Nicel.
So we believe that each of these have enough room for growth put together quantitatively we want to, you know, we would like to cross a benchmark of 5000 crores. Whether it happens in three years or five years is a number of. Is a mathematics. But I think our actions are basically driven in franchise Expansion and getting more consumers to the base. We are also seeking to expand our presence outside India. We do believe there have been some challenges in our critical markets. Earlier some African markets were under pressure. Of late, some South Asian markets have been under pressure.
But having said that, we do believe that every three years that business can double eventually getting to 8 to 10% of our portfolio. So that’s really the gist of our business. We’ve already talked about the bottom line profile of the business which we believe 17, 18% can be and so good profitable sizable business as we next three to four months.
Agam Shah
And this last question on the tax front. So next year will be being tax. Or so how is it on the tax front?
Tarun Arora
So FY26 and FY27, there won’t be any cash tax payout. There would be certainly, you know, deferred tax liability on the tax return, but there won’t be any tax. Cash tax payout.
Agam Shah
Similar to the current levels.
Tarun Arora
You are talking about the defects. Liability.
Agam Shah
Yes. So for FY25 also we haven’t paid much, right? Similar. Yeah.
Tarun Arora
So we won’t be paying. Yeah, we won’t be paying in cash tax up to FY27.
Agam Shah
Okay. Okay. Thank you and all the best. Thank you.
operator
The next follow up question is from the line of Omang Shah from Banyan Tree Advisors. Please go ahead.
Umang Shah
Hi sir, thank you for the opportunity again. Sir, the inventory, the channel inventory currently especially in glucon D and nicely is it significantly different as of now compared to last May?
Sharvil P. Patel
No, I think it’s in line with what we expect, the vehicle sales. So we are, I mean we have a replenishment based system and any challenges that we see are corrected fairly quickly. So we expect line in terms of days of our forward covers. That’s how we work. So channel rental and sir, ideally how.
Umang Shah
Much inventory since this is a seasonal product, ideally what is the level of inventory that you’re comfortable at the dealer level in terms of days.
Sharvil P. Patel
So typically there is a. There is spike which comes in the, in the season at the start of the season. So we start building the inventory. So typically Jan, Feb, March, especially January and February, the distributors are carrying fairly high inventory and we support them in various ways for them for the inventory buildup towards the May, June, the inventory actually starts dropping. So the peak can go up to 40 days. When it drops it comes down to almost 30 days, sometimes 20, 25 days level also. So it varies and also it’s a function of how the season plays out.
Umang Shah
Right, sir? Right. So fair point. And for this last one thing, on the Sugar Free India website, we were not able to locate the delight cookies while you have chocolates and sugar free and everything. So that was one thing. And second question was how have we like how, how have we positioned Sugar Free plus as opposed to sugar free and lot of things and how are we reshaping the brand in any way?
Sharvil P. Patel
So thanks for the feedback. I will check it because we are also building a Sugar Free Delight site which will eventually capture a lot of our domestic and international portfolio on sugar free extensions. But I’ll check for the cookies as well. So how are we positioning? Your next question was how are we positioning Sugar Free Gold plus versus is that the question?
Umang Shah
Yes. Yes.
Sharvil P. Patel
So what has happened is if you go back to May 23, who had put aspartame in possibly carcinogenic, not enough evidence kind of grouping. And therefore last year we had moved out of aspartame to sucralose plus chromium, which offers better experience to consumer with an added benefit of better insulin management which the chromium offers. And therefore the positioning is that it is more suitable for people who want to control their insulin levels while keeping the calories lower and not have sugar. And it’s been liked by a lot of diabetics because a lot of new consumers come through Sugar Free Gold plus and many of them are diabetics.
So that’s been a good. It’s been received very well with both the consumers, new consumers as well as by the doctors.
Umang Shah
Got it, sir. Got it. Thanks a lot, sir.
Sharvil P. Patel
Thank you.
operator
Thank you. We’ll take our last question from the line of Dheeraj Mistry from ICICI Securities. Please go ahead.
Dhiraj Mistry
Yeah. Hi. Thank you very much, sir. So my only question is regarding capital allocation. That how should we think that is whether there would be any inorganic growth going ahead and in which category we can look for. And also in that line, what would be the key metrics we look for while acquisition. Thank you.
Sharvil P. Patel
I think first of all we stick to what we’ve said over last two to three years. We are not seeking acquisition for scale. That’s one of the key tasks we did when we did with crafty Heinz India acquisition. Right now the only way we will look at acquisition will be Bolton’s spaces, which we believe are very good. We want to organically we would like to participate. Those are the spaces where we will evaluate acquisitions coming from. So typically something that we would have loved to do ourselves. Natural India is a classic example of we wanted to participate in protein and Nutrition, protein based nutrition fits in very well.
It’s a market leader science based product. So we are looking for products which fit in into our portfolio and therefore are synergistic with that adjacent to our existing category. Secondly, we are looking at which are relevant for India or outside India which help us expand our base outside India. For example, something in Sub Saharan Africa, Nigeria etc. GCC or South Asia or even Southeast Asia wherever there is opportunity for us as a Zydus winners to expand on. So there is a clear geography space we want to we have defined. There’s a clearly product space and portfolio space we have defined.
And largely the mandate we have right now we would look at any acquisition to come forward will be from our internal accruals. We will see if there is something disproportionate comes. But I don’t see that in the current horizon. So we will stick to this knitting for our approach to acquisition. And therefore if you look at it even natural is something which has been acquired from our existing resources and that is the existing approach on and our own ability to grow those organically. Those will be extremely critical for us to make it work.
Dhiraj Mistry
Got it. Got it. Any financial metrics that we will be looking out for the revenue side of let’s say 200 to 300 crore or whether we would not be paying certain X amount for the acquisition.
Sharvil P. Patel
So we won’t do anything very small. 2530 crore, 50 crore. Chances are we will not do that unless we are too excited about it, which is an exception. 100, 200 crores typically does fit in. It gets consummated far more easily. There is a proof point of the performance and there is a headroom for growth. Those are typically spaces which we like from a Bolton acquisition. But obviously these are evolving things. They’re also opportunity based. But these are typically something which will get work from us our point of view. These are broad guidelines but not cast in stone though.
But these are something which work best for us.
Dhiraj Mistry
Got it. Thank you. That’s it from my side.
operator
Thank you ladies and gentlemen. This is our last question. I now hand the conference over to the management for closing comments.
Sharvil P. Patel
Thank you and we’ll see you in next quarter. Call.
operator
Thank you. On behalf of ICICI securities limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Sam.