Geojit is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 97 in its research report dated May 30, 2018.
Geojit's research report on Granules India
Granules (Inc) is a leading generic player in the Indian pharmaceutical industry with a 2/3rd of its revenue generated from North America and Europe and the rest coming from Emerging markets like India. Q4FY18 revenue grew significantly by 39% YoY on incremental sales from newly added capacities while PAT de-grew by 55% on account of higher raw material (RM) cost and one time inventory write off. Production (in metric tonnes) increased by 41%(API), 45%(PFI) and 43% (FD) in Q4FY18 on a YoY basis. We expect EBITDA margin to remain in 17-19% range for FY19-20E with new launches in US and passing on of higher RM cost. We forecast a PAT CAGR of 6% for FY19-20 resp. on back of increasing revenue and improving margins.
We value Granules at 14x on FY20E EPS and arrive at a target price of Rs97 and retain the Buy rating.
For all recommendations report, click here
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