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.
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.
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
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.