Granules (GIL) posted revenues of INR 8,883mn with 3.5% YoY growth, which was 5.2% above our estimate of INR 8,446mn. Revenue beat was mainly driven by new product launches and increased market share for existing products in the finished dosages (FD) segment. During Q2, FDs grew by 18% (YoY), PFIs grew by 10% (YoY), and API sales dropped by 25% (YoY). Gross margin contracted by 706bps on account of increase in KSM prices (mainly PAP and Acetic acid prices are up by 100%150%) and loss of MEIS benefit. However, EBITDA Margin witnessed a higher impact (decline of 1286bps to 17% in Q2FY22 ) due to lower profitability in Para products and higher logistic cost and R&D expenses (5.3% vs 2.6% in Q2FY21). The management expects to pass on some of the increases to their customers from Q3FY22 onwards. GIL reported a PAT of INR 807mn, which was below our estimate of INR 1237mn driven by weak operational performance. As per management, the...