Accumulate Granules India; target of Rs 588: Deven Choksey

Deven Choksey recommended accumulate rating on Granules India with a target price of Rs 588 in its research report dated November 17, 2025.

Broker Research

November 17, 2025 / 13:10 IST

Accumulate

26 Aug, 2025 12:21

Volume

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Deven Choksey report on Granules India

Granules India delivered a strong performance in Q2FY26, reporting Revenue from Operations of INR 12,970 Mn, up 34% YoY, beat our estimate by 8.8% driven mainly by stronger formulation sales in North America and Europe, and improved API/PFI momentum in ROW markets. Finished Dosages contributed 74% of revenue, followed by API (13%), PFI (10%), and Peptides/CDMO (2%). Gross margin expanded by 82 bps QoQ, supported by operational efficiencies and a favourable product mix. EBITDA improved meaningfully to 2,782 mn on the back of sales growth and margin expansion, even after absorbing a INR 200 Mn EBITDA loss from the Ascelis Peptides business. Operating cash flow stood at INR 1,937 Mn, while CAPEX during the quarter was INR 2,112 Mn. R&D investments totalled INR 705 Mn (5.4% of sales), reflecting continued focus on innovation and long-term capability building.

Outlook

We roll forward our valuation to Sep’27 estimates and assign a target multiple of 18.0x Sep’27 EPS, arriving at a target price of INR 588. Given the recent rup-up in the stock, we revise our rating from “BUY” to “ACCUMULATE”.

For all recommendations report, click here