Moneycontrol
Jan 31, 2017 04:37 PM IST IST | Source: Moneycontrol.com

Buy Granules India; target of Rs 145: KR Choksey

KR Choksey is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 145 in its research report dated January 31, 2017.


KR Choksey's research report on Granules India


Granules Q3FY17 revenues were in-line with our estimates. Revenues grew by 11% YoY to INR 3.59bn (as compared to our estimate of INR 3.56bn). EBIDTA grew by 17% YoY to INR 763mn with EBITDA margins at 21.2% expanding by 110bps mainly on account of superior product mix, enhanced operational efficiency in base business coupled with high value of Finished dosages as a % of overall sales in the quarter. PAT grew by 34% YoY to INR 391mn. EPS for the quarter stood at INR 1.8 per share.


Outlook
Granules has embarked on a journey of high growth and margin sustainability, we expect revenue and earnings CAGR of around 13% and 23% respectively over FY16-18E. We maintain our rating of ‘BUY’ and reduce our target price to INR 145 (earlier INR 160; we enhance our multiple from 17x to 18x on account of the multiple levers of growth).

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