Granules India can test Rs 80-85: SP Tulsian

Granules India can test Rs 80-85, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Granules India is a vertical B2b Company which is in pharma and making the API, FDS and other pharma ingredients. Their business model is quite interesting with company having their plants in Hyderabad."

He further added, "The company having posted a topline of close to Rs 500 crore and EPS of close to Rs 10 plus but the best part if because of high depreciation burden the cash EPS of company has been very high, close to about Rs 19-20 for FY11 and I expect that at least the same performance is likely to get continued for FY12 also."

"If one looks at the shareholding pattern; the promoters are holding 41% institutional investors which include the IFC Washington, which holds but 10%. Six institutional investors are holding close to about 38-39%. So promoters plus six institutional investors are holding close to about 80% stake, so that gives a very good confidence."

"The way the business of the company has been managed; the corporate governance or transparency in the company, infact excites you that this looks to be a safe and clean driven company. And for FY12 with a topline of close to Rs 500 crore, the share is ruling at a PE multiple of close to 5.5 or 6. Generally these APIs or these type of companies are ruling at lower PE of 6-7 times but this has potential to see the PE expansion happening by maybe 20%, so one can expect a price of Rs 80-85 in the next 6-8 months."