Last Updated : Oct 22, 2020 02:22 PM IST | Source: Moneycontrol.com

Buy Granules India; target of Rs 455: Anand Rathi

Anand Rathi is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 455 in its research report dated October 22, 2020.

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Anand Rathi 's research report on Granules India


Driven by momentum in formulations and PFI, Granules had highest quarterly sales/margins/profit. Its Q2 FY21 sales grew 23% y/y to Rs8.6bn. Formulations grew 23% to Rs4.3bn, PFI sales were up 30% to Rs1.7bn and API sales grew 18% to Rs2.6bn. Product rationalisation and launches drove a 929bp surge in the gross margin (58%). Operating leverage and lower spending on R&D were prime drivers of the 935bp EBITDA-margin expansion to 30%. Adjusting for reversal of provisions and Covid-related costs, PAT grew 73% to Rs1.7bn.


Outlook


Formulation launches and a foray into newer regions are likely to drive revenue/ PAT CAGRs of ~19%/~30% over FY20-23. We raise our target price to Rs455 (earlier Rs330) and maintain our Buy recommendation.


For all recommendations report, click here


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First Published on Oct 22, 2020 02:22 pm
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