Buy Granules India; target of Rs 500: Sharekhan

Sharekhan is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 500 in its research report dated January 23, 2024.

Broker Research

January 24, 2024 / 15:44 IST

Buy

26 Aug, 2025 12:21

Volume

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Sharekhan's research report on Granules India

Granules reported mixed set of earnings where revenue reported flat on yearly basis to Rs 1,155 crs (1% below our estimates), EBITDA grew by 8% YoY to Rs 2505 Crs (5% above our estimates) and PAT grew by 1% YoY to Rs 125 crs ( 1% below our estimate). Healthy traction in value added product in the US region in the Formulation’s segment followed by RM cost rationalization led to an increase in EBITDA margin towards all time high levels of 21.7%. Capex guidance lowered from Rs 700 Crs to Rs 600 Crs in FY25E due to delay in the execution of Kakinada plant. As on 9MFY24, the company spent Rs 83 crs Capex and intends to spend Rs 500 crs by FY24E. The company expects leadership in key molecules like Metformin and Paracetamol by setting up backward integration through KSM plants of DCDA and PAP, hence we have increased our FY25 and FY26 earnings estimates. we have increased our FY25 EPS by 7% to Rs 31.8 per share and FY26E EPS by 18% to Rs 40.5 per share.

Outlook

At the CMP, the stock is trading at attractive levels of ~13x/10.2x its FY2025E/FY2065E earnings , thus we maintain Buy with increased price target (PT) of Rs.500.

For all recommendations report, click here