KR Choksey's research report on Granules India
Granules’ revenue missed our estimates due to decline in API and PFI segment. EBITDA missed our estimate due to higher than-expected other expenses, Adj. PAT missed due to higher-than-expected interest expenses. We increase our FY26E/FY27E EPS estimates by 0.3%/4.9% to INR 26.5/INR 34.1, respectively as we anticipate, multiple new product filings in niche therapies and launches are in progress, recent FDA approvals for formulations in diabetic and ADHD medications to bolster growth in the near term and Genome valley facility is set to further boost capacity in the near future.
Outlook
Currently, the stock is trading at a P/E multiple of 22.0/17.1 based on FY26E/FY27E EPS, respectively. We roll over our valuation multiple to FY27E and assign a PE multiple of 20.6x to arrive at a target price of INR 700 (unchanged) and we maintain our “BUY” rating on the stock.
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