Buy Granules India; target of Rs 769: KR Choksey

KR Choksey's research report on Granules India

GRANULES is expected to continue to see strong growth in FDFs with growth in new products; partially offset by continued weakness in APIs with higher channel inventory for Paracetamol APIs in regulated markets. We expect the company to clock in 14.0% and 33.3% CAGR rise in revenue and net income, respectively, over FY24- FY26E (vs. 13.4% and 30.2% CAGR rise seen over FY24-FY26E earlier).

Outlook

We apply a higher PE multiple of 26.5x (earlier 16.0x) on FY26E EPS of INR 29.0 (earlier INR 27.7) and arrive at a TP of INR 769 (earlier INR 443) and upgrade it to BUY from ACCUMULATE as the upside potential is 16.2% from the CMP.

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