Feb 01, 2017 10:07 AM IST IST | Source: Moneycontrol.com

Buy Granules India; target of Rs 220: Centrum

Centrum is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 220 in its research report dated January 30, 2017.

Centrum's research report on Granules India

GIL has developed a new API for multiple sclerosis which has a market size worth US$4.0bn (Rs 270bn), it has identified a partner for formulations and its partner plans to file ANDAs with US FDA. Profitable product mix, capacity expansion, focus on process innovation, cost optimisation, commencement of Omnichem JV production and upward movement on value chain will improve GIL’s performance. GIL is among the top picks in the pharma sector.

Outlook
We maintain Buy rating on Granules India (GIL), with a revised TP of Rs 220 (earlier Rs 190) based on 14x March’19 EPS of Rs 15.8 as we have rolled over to FY19 estimates. GIL’s Q3FY17 results were below our estimates. GIL reported revenue growth of 11% YoY, 110bps improvement in EBIDTA margin to 21.2% and 38%YoY growth in net profit. The company reported 440bps YoY improvement in gross margin to 51.8% from 47.4%.

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