Buy Granules India; target of Rs 417 Sharekhan

Sharekhan is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 417 in its research report dated November 09, 2023.

Broker Research

November 13, 2023 / 12:00 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on Granules India

For Q2FY2024, Granules reported revenue growth of ~3% y-o-y/+20% q-o-q to Rs. 1,189 crore driven by strong growth of 27% YoY in its formulations revenue (~62% of sales) and pick up in the North America region which grew by 11% YoY to Rs 799 crs. Some of the delayed launches of the approved products, both in the U.S. and other geographies, will be launched in this and the coming quarters and would contribute to higher revenue and profitability. The company plans to spend Rs. 2,000 crore over the next five years to build a green chemistry plant at Kakinada, AP, which will enable it to be carbon zero in API manufacturing. An ambitious capex plan should help it to become a fully integrated player, which can bring benefits of operating leverage over medium to long term.

Outlook

The stock currently trades at attractive valuations of ~14.7x/12.4x its FY2024E/25E earnings vs. its peers trading at ~21.0x/17.1x their FY24E/FY25E EPS estimates. We maintain Buy with a revised PT of Rs. 417.

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