Maintain BUY with a TP of Rs 170 (16x Dec-19E EPS). With fresh capacities kicking in in the API and PFI segments, Granules India (GRAN) grew its top line at ~14%YoY vs 9-10% in 1HFY18. The API segment grew 21%YoY to ~Rs 1.5bn, PFI grew 14% YoY to ~Rs 1bn and formulation sales increased 9%YoY to ~Rs 1.6bn. Higher share of API sales in the revenue mix and increased prices of certain raw materials due to either crude related hikes or capacity issues globally, led to a QoQ decline in the gross margin to 49.1% (from 49.6%) and EBITDA margin dropped to 18%. Higher depreciation due to the increased asset base and a 36% ETR saw reported PAT decline 10%YoY.