As was indicated by the mgmt., Granules has achieved a significant ramp up in revenues (+35% YoY in FY19P) on the back of expanded capacities. While margins remained subdued over the year owing to raw material cost pressures and lack of US approvals for new API plants, better business mix and moderated RM prices will enable a recovery in margins, and the robust revenue growth will also reflect in improved EBITDA/earnings. Granules is out of its capex phase and healthy FCF will enable reduction in debt hereon. The co is also committed to relinquish its pledge (down 17% to 43% of promoter holding since Dec-18), which has been the key overhang on the stock. At 9.7/7.9x FY20/21E EPS, Granules is trading at a ~40% discount to peers. Improving return ratios and steady growth outlook merit a higher multiple. We maintain BUY on Granules following another strong quarter which was in-line with our estimates. Our TP is unchanged at Rs 170/sh (12x FY21E EPS).