ICICI Direct's research report on Granules India
Granules is a large-scale vertically integrated company that manufactures API, intermediates and finished dosages and has seven manufacturing facilities along with B2B & B2C marketing & distribution. • Revenue mix FY22: Formulations – 52%, API (API+PFI) – 48% • Top five products (Paracetamol, Ibuprofen, Metformin, Methocarbamol, Guaifenesin) contributed 81% to FY22 revenues.
Outlook
We maintain BUY rating as Granules 1) focus on backward integration, 2) initiatives like passing on price hike to customers, 3) compelling risk-reward matrix based on FY24E earnings. Valued at Rs 375 i.e. 14x P/E on FY24E EPS of Rs 26.8.
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