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Last Updated : Oct 22, 2020 04:01 PM IST | Source: Moneycontrol.com

Buy Granules India; target of Rs 459: KRChoksey

KRChoksey is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 459 in its research report dated October 22, 2020.

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KRChoksey's research report on Granules India


Granules India reported Revenue growth of 22.7% YoY (up 16.7% QoQ) to INR 85,812 Lakhs in Q2FY21. EBITDA grew 78.6% YoY (up 39.7% QoQ) to INR 25,641 Lakhs in Q2FY21. EBITDA margin expanded to 29.9% in Q2FY21 (+935bps YoY), and expanded 492bps on QoQ basis. Net Profit grew 70.8% on YoY and 46.8% on QoQ basis to INR 16,363 Lakhs. Company launched 1 product through Granules Pharmaceuticals Inc. during the quarter and received 4 ANDA/dossier approvals. The Company’s Board of Directors have recommended a second interim dividend of INR 0.25/share. Granules’ Net Debt decreased by 25.8% YoY and Net Debt/EBITDA stood at 0.7x at the end of H1FY21. Company reported ROCE of 33.2%, on account of higher capacity utilization.


Outlook


The stock is currently trading at a P/E multiple of 17.5x/16.0x on FY21E/FY22E earnings. We continue to apply P/E multiple of 19.0x on FY22E EPS of INR 24.2/share (earlier INR 20.5/share) to arrive at a revised target price of INR 459/ share, an upside of 18.9% over the CMP. Accordingly, we upgrade our rating to a “BUY” on the shares of Granules India.


For all recommendations report, click here


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First Published on Oct 22, 2020 04:01 pm
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