P&G Health VMS power brands gain from transformed distribution model

Investment View and Recommendation

ICICI Securities Retail Equity Research, in its August 7, 2026 result update on P&G Health Ltd., retains a BUY recommendation with a 12-month target price of Rs 7,090, compared with the current market price of Rs 6,040.

The broker’s thesis is centred on the benefits of P&G Health’s transformed go-to-market distribution model, traction in its power brands and exposure to the vitamins, minerals and supplements (VMS) category. P&G Health is a pharmaceutical and over-the-counter company with legacy brands including Neurobion Forte, Polybion, Evion, Livogen, Nasivion and Seven Seas. The VMS category contributes about 67 per cent of sales and is considered under-recognised and under-penetrated.

Q1FY27 Financial Performance

Reported Q1FY27 operating income increased 7.4 per cent year on year to Rs 363.7 crore. Growth was led by Neurobion Forte, Livogen and Polybion, while Evion and Nasivion recorded declines.

The improvement in EBITDA and gross margin was supported by a 129-basis-point increase in gross margin to 73.5 per cent. However, EBITDA margin fell sequentially as employee costs and other expenses increased. ICICI Securities characterises revenue growth as normalised growth on a higher base and attributes the underlying improvement to structural distribution changes intended to strengthen the supply network.

Power Brands and Distribution Momentum

The broker highlights the strong super-distributor network created under the new go-to-market model. In FY26, P&G Health launched Livogen Iron Gummies and Neurobion Nerve Pain Relief Cream as line extensions.

IQVIA MAT June 2026 data showed that sales of the top 10 brands grew 11.7 per cent to Rs 1,144.7 crore, representing 79.7 per cent of IQVIA sales. Neurobion Forte sales grew 24.5 per cent to Rs 300.6 crore, while Livogen sales increased 22.5 per cent to Rs 103.5 crore.

The broker notes that quarterly performance may remain uneven, but believes annual brand data better reflects the impact of the transformed distribution model.

Growth Drivers and Management Outlook

Management is positioning VMS as complementary nutritional support for emerging GLP-1-related opportunities. ICICI Securities also identifies the following factors as supportive of a steadier performance than before FY25:

• Calibrated marketing and promotional spending.
• Patient-centric campaigns.
• Expansion of brands in Tier II to Tier VI towns.
• Support from the global P&G group.

Earnings Estimates and Valuation

ICICI Securities builds in approximately 11 per cent revenue growth over FY26-FY28E and expects EBITDA margin to remain in the 30-32 per cent range. Its estimates for FY27E and FY28E are as follows:

The target price of Rs 7,090 is based on 30 times FY28E earnings per share of Rs 236.3.

Key Risks

• The sustainability of the new distribution model.
• Impending competition in the VMS category.