21 January 2020 GRAN is on a sustained earnings growth trajectory, led by higher business from forward integration, expanding its portfolio and reach. We raise our EPS estimate by 6.5%/7.3%/2.2% for FY20/21/22 to factor in (a) increased formulation business on account of ANDA launches in the US and (b) improving profitability due to forward integration and addition of higher- margin API molecules in the portfolio. Reiterating Growth was mainly driven by strength in the formulation dosage (FD) segment (+23% YoY; 54% of total sales). Gross margin expanded 750bp YoY to 50.7%, led by the higher share of formulation revenue. 20.2%), partly offset by higher other expenses (+160bp YoY) and staff cost (+70bp YoY). Strong EBITDA growth and a lower tax rate led to PAT growth of 56.4% YoY to INR944m (our estimate INR876m). GRAN reported one-time provision charge for impairment of INR320m related to the divestment of Granules Biocause Pharma, resulting in lower reported PAT of INR641m.